Per Jansson: Monetary policy communication at a crossroads
Speech by Mr Per Jansson, Deputy Governor of the Sveriges Riksbank, at the Sveriges Riksbank, Stockholm, 13 February 2026.
The views expressed in this speech are those of the speaker and not the view of the BIS.
Accompanying slides to the speech
Central bank monetary policy has faced major challenges in recent years. As a result, their communication has changed to some extent. Many central banks have toned down their forward guidance on monetary policy. Instead, it is more common to talk about being "data dependent" and conducting monetary policy "meeting by meeting". Although, as we shall see, there are some natural explanations for this shift, it is not unproblematic. I believe that it is both possible and desirable to continue with forward guidance, albeit perhaps in a slightly adapted form. This is what I intend to talk about today.
There are two main reasons why central banks have become less inclined to provide forward guidance. One is that the experiences of forward guidance in recent years have not been particularly favourable. Before inflation started to rise globally in 2021−2022, central banks had long struggled to bring inflation up to target. This was expected to be a lasting phenomenon and therefore central banks signalled, explicitly or implicitly, that interest rates were likely to remain low for a long time to come.
Once inflation started to rise, many central banks judged that the higher inflation was transitory and would soon return to target. While the higher inflation did not prove to be permanent, it did not fall back of its own accord. The return to the target required that central banks tightened their monetary policy relatively vigorously. Thus, the guidance before and at the beginning of the inflation upswing was misleading (Figure 1). It can therefore be assumed that one explanation for the now toned-down monetary policy guidance is "once bitten, twice shy".