ECB communication policies on monetary policy: An overview and comparison with the Federal Reserve

This paper provides an overview of (research on) the communication policies of the ECB. We first compare the communication policies of the ECB and the Fed. Despite many similarities, there are also some differences which in part reflect that both central banks have different objectives. This became more pronounced after both central banks had concluded their monetary policy strategy reviews. Thereafter, we zoom in on forward guidance and discuss recent research on the impact of the ECB’s communications, and recent changes therein as a result of the ECB’s monetary policy strategy review. It is concluded that this review was to a large extent a confirmation of the actual change in the ECB strategy. Due to the rapid increase in inflation that started after the recovery of the COVID-19 pandemic, the review was quickly outdated.