ECB Says Consumer Inflation Expectations Fall Significantly
The pullback comes just over a week before policymakers are due to set borrowing costs, with a half-point hike in the deposit rate to 3% all but guaranteed.
(Bloomberg) -- Consumer expectations for euro-zone inflation receded “significantly,” according to the European Central Bank, bolstering calls for the pace of interest-rate increases to be slowed.
Expectations for three years ahead plunged to 2.5% in January from 3% in December, the ECB said Tuesday in its monthly survey. There was a decline over the next 12 months too — to 4.9% from 5%.
The pullback comes just over a week before policymakers are due to set borrowing costs, with a half-point hike in the deposit rate to 3% all but guaranteed. The data follow a worse-than-expected reading last week for core inflation, which hit a record and emboldened hawks advocating prolonged monetary tightening.
German bonds advanced Tuesday after the ECB’s release, lowering the 10-year yield as much as 10 basis points to 2.65%. Money markets, meanwhile, eased rate-hike wagers, pricing a peak of about 4.06% by October compared with as much as 4.09% on Monday.
- Economic-growth expectations for the next 12 months continued to shift upwards, to -1.2% from -1.5% in December
- Unemployment seen at 11.6% vs. 11.9%
--With assistance from .
(Updates with market reaction in fourth paragraph.)
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