We analyze how the provision of an explicit numerical inflation target provides a focal point for agents’ expectations, when information is imperfect. Communicating a target and a tolerance band around it provides a clear framework with which to evaluate monetary policy outcomes. We show how inflation targeting exploits the self-reinforcing loop between success and credibility, to help the Central Bank endure large and longlasting shocks. Last, we derive the optimal band width around the target, that exploits the benefits of providing a focal point, while maximizing the probability of success.