Les attentes d’inflation et la poli­tique moné­taire

In 2022, inflation reached 8.4 % in the euro area, a level not seen since the creation of the currency union in 1999. Against this backdrop, one may well wonder whether economic agents still expect an inflation rate close to the 2 % target set by the European Central Bank (ECB). Such expectations would contribute to a stable economic environment by precluding a vicious circle of higher inflation expectations feeding inflation through an anticipatory effect.

This article reviews several measures of inflation expectations and delivers a rather reassuring message: despite the increase in short-term inflation expectations (one year ahead, for example), medium- and long-term inflation expectations (five or ten years ahead) have thus far remained close to the ECB’s 2 % target. There are, however, a number of signals that should not be ignored. For instance, inflation expectations from surveys of professional forecasters indicate that a relatively high proportion of respondents expect inflation to be above 2.5 % in the medium term.

In brief, the anchoring of inflation expectations requires ongoing attention. The longer inflation strays from the ECB’s target, the greater the risk of inflation expectations going off target as well. Such a loss of credibility would oblige the central bank to dispense tough medicine and drastically tighten credit conditions, at the risk of dragging the economy into a recession.