This paper presents novel causal evidence on the effect of different communication channels employed by central banks on people's expectations about future inflation. In a pre-registered randomized survey experiment among a representative household sample, we examine adjustment of inflation expectations when confronted with a press conference statement by the president of the European Central Bank (ECB) articulating the bank's commitment to its 2% inflation target. We show that the medium of communication matters, holding the content of the message constant: Relative to a text transcript, audiovisual mediums strengthen updating toward the inflation target, with dynamic mediums (audio and video) being more effective than static mediums (photo). In a Bayesian updating framework, we find that audiovisual communication increases the signal gain as compared to textual communication, i.e., respondents put more weight on the information they receive. We also show that economically less-informed households (those consuming less economic news) are more responsive in updating to audiovisual mediums. Overall, our results suggest that central bank messages aimed directly at the public can help to anchor inflation expectations.

We study how firms’ expectations respond to prospective tariff shocks using a randomized survey experiment among Swiss manufacturing firms. When confronted with potential U.S. tariffs, respondents expect sizable declines in turnover and investment, yet anticipate increases in ex-tariff export prices despite falling demand. This combination of declining activity and rising prices runs counter to the standard prediction of trade models, in which tariffs reduce foreign demand and put downward pressure on exporters’ prices. The observed pattern is consistent with a destination-specific cost-push mechanism, whereby tariffs raise exporters’ marginal costs through compliance burdens, logistical frictions, or reduced scale. Embedding firms’ stated price and sales expectations in a parsimonious structural pricing model, we quantify the implied cost changes and recover sector-level demand elasticities. The estimates indicate substantial heterogeneity across industries and are, on average, consistent with short-run trade elasticities from the recent literature. Moreover, we corroborate the experimental evidence using panel survey data on firms’ expectations around an unexpected U.S. tariff announcement.