Euro Area Longer-Term Expectations for Core Inflation Revised Upwards to 1.8%-ECB

sStone euro sign is crumbling

In the recent ECB Survey of Professional Forecasters, the longer-term expectations for key inflation had been revised up to 1.8% for 2026 from 1.7% for 2025 in the previous round.

Source: ECB


Euro Stoxx 50 down -0.33%, EUR USD down -0.18%

At the same time, the market-based measures of inflation compensation and option-implied risk-neutral inflation probabilities had remained widely unchanged since the June monetary policy meeting.

The long-term GDP-weighted sovereign yields had dropped in parallel with risk-free rates since June’s meeting, but they were still far above the levels recorded last December.

The annual growth of M3 had reduced further in May, implying a normalization of monetary flows compared with the peak of the crisis.

The Governing Council was seeking to update its forward guidance on the key ECB interest rates towards a commitment to retain monetary accommodation on a consistent level relative to the 2% target.

The new monetary strategy in the ECB’s forward guidance on interests will involve redefinition of the ECB’s price stability objective as a 2% inflation target over the medium term and a conditional commitment to account for the implications of the effective lower bound in low nominal interest rates.


European Junk Bonds Are Among This Year’s Best Performers

Previous article

German Consumer Sentiment Slips in August. Downtrend to Continue in September.

Next article

You may also like


Leave a reply

Your email address will not be published.

More in News