Bank for International Settlements research tracks central banks’ shift towards scenarios and policy rate projections as uncertainty rises

The Bank for International Settlements has published a BIS Quarterly Review article analysing how central banks are adapting monetary policy communication to heightened uncertainty, finding a growing use of scenario analysis alongside traditional fan charts and a move away from descriptive policy guidance towards publishing policy rate projections, often linked to alternative scenarios. Using new hand-collected data from 25 inflation-targeting or similar central banks across 2006, 2012, 2019 and 2025, the article documents a marked increase in references to uncertainty, with uncertainty-related wording in monetary policy statements rising to up to about 15% by 2025 and roughly 40% of speeches highlighting uncertainty as a key theme. In 2025, almost 75% of the sample published fan charts, nearly 70% included qualitative risk discussions, and around 45% used scenarios, up from about 25% before the Covid-19 pandemic. On the policy outlook, descriptive guidance fell from more than 55% of central banks in the 2010s to around 20% in 2025, while publication of policy rate paths or scenarios with rate paths increased but remained limited, with no single guidance tool used by more than a third of central banks and around half providing neither descriptive guidance nor a rate path. The article also sets out a taxonomy distinguishing general from specific uncertainty and discusses the practical trade-offs and challenges of the main tools, including fan-chart width after large shocks, scenario selection and calibration, and risks around market over-focus or perceived loss of flexibility when publishing rate projections.