Global Economics Analyst What Has the World Learned About Central Bank Communication

Economics Research 14 August 2026 | 1:45PM EDT

What Has the World Learned About Central Bank Communication?

n Fed Chairman Kevin Warsh aims to revise the FOMC’s communication strategy, Joseph Briggs | with a goal of streamlining information and limiting forward guidance. In this Goldman Sachs & Co. LLC Global Economics Analyst, we compare communications practices across major Megan Peters central banks and examine the effects of prior communication reforms. | Goldman Sachs International n Global central banks have increased communication and transparency over the last 25 years. Nearly all central banks publish economic forecasts, hold press conferences after meetings, publish meeting minutes, and regularly use forward guidance as a policy tool. Relative to other central banks, the Fed is an outlier in publishing individual forecasts (particularly for interest rates) but is one of the few that does not publish a quarterly monetary policy report (it does so semi-annually). Recently, the Fed has provided more information on the policy outlook than other central banks via formal (e.g., minutes) and informal (e.g., public appearances) channels. n The global shift to increased transparency has had clear benefits. Leveraging the cross-country evidence, we find that major central bank communication reforms that increased communication lowered year-ahead rates volatility by about 10%, with larger effects from the introduction of meeting minutes, press conferences, and forward guidance. n More importantly, we find that better communication improves transmission of monetary policy. Using the average meeting-day policy surprises over the last 5 years as a proxy for communication effectiveness, we find that the transmission of policy surprises to our financial conditions indices (GS FCIs) is only 70% as effective for central banks at the median of the historical surprise distribution (vs. a no surprise benchmark). n There are two frequently cited drawbacks to increased communication. First, central banks may be slower to adjust policy to incoming information that goes against guidance, but we find that guidance-providing central banks tend to (if anything) react more quickly to forecast surprises. Second, while too much communication could confuse markets and amplify volatility, we find little evidence that major central banks have reached a point where more information is counterproductive.

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Goldman Sachs Global Economics Analyst

What Has the World Learned About Central Bank Communication?

Fed Chairman Kevin Warsh aims to revise the FOMC’s communication strategy, with a goal of streamlining information and limiting forward guidance. Any changes will be deferred until after the Chairman’s task force completes its review later this year. We expect that most of the debate around Fed communication practices will focus on changes to the Summary of Economic Projections (SEP), mostly because we think many Fed officials will be reluctant to take a major step away from policy transparency.

The outcome of the communications review is uncertain, however. The media reported that Warsh raised the possibility of reducing the number of rate-setting policy meetings to six per year (with two meetings devoted to broader economic topics) at the July FOMC meeting. Moreover, at the July press conference Warsh did not commit to holding post-meeting conferences beyond this year. As a result, changes to FOMC communications, and their potential impact on rates and FX markets, are top of mind.

In this Global Economics Analyst, we frame the current communications debate by 1) comparing current practices across major central banks and 2) examining how these changes have historically impacted monetary policy transmission.

Comparing Recent Trends in Central Bank Communication The last 25 years have seen a consistent shift towards more transparent global central banking, with standard indices indicating increased communication, information provision, and transparency by nearly all…