Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/324983 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 11992
Publisher: 
CESifo GmbH, Munich
Abstract: 
We examine how speeches by Federal Open Market Committee (FOMC) members, including regional Fed presidents, shape private sector expectations. Speeches that signal rising inflationary pressures prompt both households and professional forecasters to raise their inflation expectations, consistent with Delphic effects. Only professional forecasters respond to Odyssean communications–statements about the Fed's intended policy response–leaving Delphic effects as the dominant channel for households. These household responses are driven by speeches from regional presidents, likely due to greater visibility in regional media coverage. A general equilibrium model, featuring agents who differ in their ability to interpret Odyssean signals, explains this heterogeneity.
Subjects: 
central bank communication
Delphic
Odyssean
inflation expectations
textual analysis
expectation formation
JEL: 
E31
E58
D83
Document Type: 
Working Paper
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