In other words, such expectations are susceptible to the observed inflation rate. This implies that it will take time for them to rise when the observed inflation rate is low. The adaptive formation of expectations reflects not only actual prices at the time but also people's past experiences, as well as norms that were cultivated through those experiences.
Interest rates in the euro area are currently very low, both in nominal and in real terms. This also holds true for risk premiums. For instance, euro-area enterprises with a BBB rating for bonds with a maturity of 7-10 years have to pay an average interest rate of only around 4¾%. This represents a premium of merely ¾ percentage point over comparable government bonds.