Another day, another new low for the key long-term euro area inflation expectations

Author: Justin Low | Category: News

But the ECB says that inflation expectations are not deanchoring...

EUR 5Y inflation swap forward
ForexLive
When I posted this on Friday, the market gauge of long-term euro area inflation expectations were at ~1.16% but it has fallen to under near ~1.12% now to start the new week. For some context, the gauge here has fallen by nearly 17 bps since the ECB monetary policy meeting on 6 June this month.

So, how low is low enough before the ECB starts to draw the line?

Officials are still seemingly calm about the issue for now, but every day we are moving closer to that threshold.

FineScenes at the ECB...

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