IDEAS home Printed from https://ideas.repec.org/a/ecb/ecbbox/202300052.html
   My bibliography  Save this article

Consumers’ interest rate expectations in a monetary policy tightening cycle

Author

Listed:
  • Charalampakis, Evangelos
  • Di Nino, Virginia

Abstract

Evidence from the ECB Consumer Expectations Survey (CES) shows that consumers’ expectations for interest rates on mortgages and savings accounts have increased, in line with actual interest rate developments. Since June 2022 an increasing share of respondents, particularly among those with an adjustable rate mortgage (ARM) which are generally more directly exposed to interest rate changes, has favoured lower interest rates. A growing share of households with an ARM also expects difficulties in meeting their mortgage payments in the near future and intends to refinance the mortgage contract. In line with their higher exposure to interest rate changes, spending expectations of respondents with an ARM are more sensitive to changes in expected interest rates. Overall, the results of the CES suggest that consumers have been progressively incorporating the impact of higher interest rates into their spending decisions. JEL Classification: E03, E21, E52

Suggested Citation

  • Charalampakis, Evangelos & Di Nino, Virginia, 2023. "Consumers’ interest rate expectations in a monetary policy tightening cycle," Economic Bulletin Boxes, European Central Bank, vol. 5.
    • Handle: RePEc:ecb:ecbbox:2023:0005:2
    as

    Download full text from publisher

    File URL: https://www.ecb.europa.eu//pub/economic-bulletin/focus/2023/html/ecb.ebbox202305_02~09baa904dd.en.html
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    consumer expectations; Consumption growth; monetary policy;
    All these keywords.

    JEL classification:

    • E03 - Macroeconomics and Monetary Economics - - General - - - Behavioral Macroeconomics
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecb:ecbbox:2023:0005:2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Official Publications (email available below). General contact details of provider: https://edirc.repec.org/data/emieude.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.