WP - 2026-09-09 - Alexander Goetz, Lucas Kyriacou, Florence Miguet Heimlicher and Stefanie Siegrist: Do Swiss households revise their inflation expectations after monetary policy announcements?

This paper investigates the impact of monetary policy announcements (MPAs) on household inflation expectations using microdata from the Swiss Consumer Sentiment Survey. Employing an event study approach, we reveal an asymmetric response: while policy rate hikes or decisions to keep rates constant reduce household inflation expectations, rate cuts fail to elicit a reaction. The effect is particularly robust for short-term expectations, with a much less clear-cut influence on long-term expectations. Households across the expectation distribution - both moderate and extreme - react to announcements, indicating a broad impact. We find that household reactions are driven primarily by the anticipated component of policy rate changes, whereas surprising moves tend to be interpreted as signals of new information regarding inflationary pressure. Finally, we report that demographic heterogeneity matters: the effect of MPAs is driven by German-speaking households and tertiary-educated individuals, while others show no consistent response, underscoring the importance of targeted communication strategies for effective monetary policy transmission.