Inflation expectations are influenced not only by economic fundamentals and the cumulative impact of our past policies, but also by market expectations of future policy settings, including net asset purchases. Ahead of our meeting last week, the median market expectations for net purchases beyond September 2018 were small.
It follows that the contribution to our inflation outlook from expected future net purchases was also modest. As a result of this assessment, last week the Governing Council concluded that progress towards a sustained adjustment in inflation has been substantial so far.