They serve as a snapshot in time and are inevitably surrounded by uncertainty. That is precisely why the Eurosystem closely and continuously monitors a broad array of inflation indicators – including those from financial markets. This allows for more real-time monitoring, but also helps to assess whether the models fully capture the inflation momentum and persistency.
The market view on inflation developments therefore often serves as an important cross-check, both for the baseline scenario and the risks associated with it. Currently, market-based inflation measures are close to multi-year peaks, both in the short and medium term.