Inflation expectations for the year ahead eased to 2.9%, down from 3.0% a month earlier. And that is the lowest level since September 2021. Meanwhile, inflation expectations for the three years ahead is seen at 2.4%. That is still above the ECB’s target of 2% but at least lower than the 2.5% reading from the prior month.
The trend is at least still helping the ECB to sell their imminent rate cut next week at least. But we’ll have to see if price pressures can continue to come down further going into next year. The “easy” part is getting prices down to 3% but the “hard” part is to sustainably get that back to the 2% target. And that is not just for the ECB, but all other major central banks as well.
