Research Insights: How Do Monetary Policy Announcements Affect Expectations on Inflation and on the Monetary Policy Rate?

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Aguilar-Argaez, Ana;
Alcaraz Pribaz, Carlo;
Dec 2022
Monetary policy announcements by the Central Bank of Mexico influence professional forecasters expectations on inflation and the monetary policy rate. Our fixed-effects models suggest that Mexicos long-run inflation expectations are anchored. Mexicos central bank communication strategy has been an effective tool to manage inflation expectations in the short run and to anchor inflation expectations in the long run.