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Keywords:

  • E58
  • central banks;
  • transparency;
  • Federal Reserve;
  • ECB;
  • policy inclinations

We examine whether central banks should complement their inflation forecasts with interest rate projections. Introducing a central bank loss function that accounts for deviations from announcements, we incorporate the publication of policy inclinations into a dynamic monetary model. We show that in the presence of cost-push shocks, the publication of interest rate forecasts tends to improve welfare.