Central banks haveincreased their public disclosures about their private information regardingthe economy’s current and future state over time. While previous researchfocuses on the benefits of this increase in monetary policy transparency, weconsider and examine three related but unintended costs. First, monetary policytransparency reduces speculators’ incentives to collect private informationabout the aggregate-level component of firms’ cash flows and to incorporatethis information into stock prices. Second, this reduction in aggregate-levelinformation induces managers to rely less on stock prices when makinginvestment decisions. Third, consistent (inconsistent) with an indirect (a direct)information channel through stock prices (central bank disclosures), we findthat investment efficiency falls in subsequent periods. Our results are robustto holding aggregate conditions and monetary policy more broadly constant andvary cross-sectionally as our analytical framework predicts. Importantly,managers can incentivize speculators to collect more aggregate-levelinformation by disclosing more firm-level information