Inflation and Monetary Poliy

KOF economists Alexander Rathke and Alexis Perakis analyse the interest-rate decisions taken in the eurozone, the United States and Switzerland. They also comment on the political risks posed by the snap elections called in France.

A recent study by KOF analyses the impact that central bank communication has on financial markets, which are a key transmission channel for monetary policy. The findings show that monetary policy speeches are an important source of information for the formation of expectations in financial markets. The findings also suggest that volatility in financial markets increases when a central bank communicates too complexly.

Alexis Perakis, monetary policy expert at KOF, talks in this interview about his predictions for inflation, interest rates and the Swiss franc exchange rate this year. He considers the current debate about interest-rate cuts to be premature.

In today’s ever-changing global economy, clear and effective communication by central banks is crucial to build trust in their policies and manage public expectations. A new study by researchers at KOF and ETH uses an experiment to investigate how central banks influence inflation expectations through different media formats and which communication formats are most effective.