A KISS for central bank communication in times of high inflation

During the post-pandemic inflation surge, many central banks used communication about the inflation outlook to limit spillovers from realized to expected inflation. We present novel survey evidence showing that ECB guidance about the projected inflation path lowers households’ inflation expectations when inflation is unusually high. Qualitative, positively framed messages have the largest effects on short-term expectations, while simple visualizations are particularly effective at longer horizons. Effects are heterogeneous across socio-demographic groups. Our findings suggest that, regarding their communication, central banks should ‘keep it sophisticatedly simple (KISS)’. • Two RCTs identify causal effects of ECB communication in 2022 inflation surge. • Non-quantitative language more effective in reducing inflation expectations. • Visual projections anchor inflation expectations across horizons most strongly. • Effects larger for women, East Germans and less-educated individuals. • Communication lowers uncertainty and shapes belief updating.