Central bank comms affect long-run uncertainty – BoE paper


Central banks wanting to influence long-term interest rates should “take seriously” how communication affects uncertainty, a working paper published by the Bank of England says.

“In our view, this channel has been under-appreciated… especially as there is increasing evidence that uncertainty has macroeconomic impacts,” authors Stephen Hansen, Michael McMahon and Matthew Tong write. News about economic uncertainty “can have increasingly large effects along the yield curve”, they say.


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