In the long run, the fundamental economic data are of more relevance for inflation expectations. Long term average inflation expectations as reported by the ECB’s Survey of professional forecasters have been at 1,9 % for the last 18 quarters consecutively. Very similar results have also been extracted from other surveys like that of ‘Consensus Economics’ or the ‘Euro Zone Barometer’.
Overall, the Eurosystem has achieved credibility among market participants. This is also very important considering the uncertain environment, which the Governing Council of the ECB faces, in its day-to-day decision-making. In what follows, I am going to touch on this issue.