After the announcement of our new strategy and forward guidance, the risk distribution around the future evolution of the 3-month Euribor has been truncated from the top, meaning that investors have effectively priced out contingencies that foreshadow a very steep increase in policy rates (Slide 10).
Such expectations are consistent with our new September ECB staff projections, which show that inflation is expected to remain below our 2% target in the medium term. The second development relates to the distribution of risks around the future inflation outlook. Since the beginning of the year, the balance of risks priced in by investors has noticeably shifted to the upside.