To my knowledge, no individual private sector analyst or forecast is projecting deflation in the euro area either; this is true, in particular, for the ECB’s Survey of Professional Forecasters. The longer term expectations, as measured by the 5-year break-even inflation rate 5 years ahead derived from inflation-linked bonds hover around 2%.
Moreover, the available forecasts and expectations do not foresee any material risk of deflation in the United States either. Overall, while a number of factors suggest that inflationary pressures will decline significantly, there are currently no signs of deflationary expectations. As long as inflation expectations remain firmly anchored, deflation will therefore remain a rather remote risk. 5.