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Policy expectation errors during the recent tightening cycle – insights from the ECB’s Survey of Monetary Analysts

Author

Listed:
  • Akkaya Blake, Yıldız
  • Bitter, Lea
  • Brand, Claus
  • Sá, Diogo

Abstract

Financial markets and analysts significantly underestimated the pace and size of the recent increases in the key ECB interest rates. This box measures the size and dynamics of policy expectation errors. Based on information from the ECB’s Survey of Monetary Analysts, it suggests that these expectation errors were driven mainly by revisions to macroeconomic expectations, indicating that analysts perceived a broadly consistent policy reaction to macroeconomic developments. JEL Classification: E52, E44, G12

Suggested Citation

  • Akkaya Blake, Yıldız & Bitter, Lea & Brand, Claus & Sá, Diogo, 2024. "Policy expectation errors during the recent tightening cycle – insights from the ECB’s Survey of Monetary Analysts," Economic Bulletin Boxes, European Central Bank, vol. 1.
    • Handle: RePEc:ecb:ecbbox:2024:0001:6
    Note: 92649
    as

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    More about this item

    Keywords

    excess returns; expectation error; Monetary policy expectations; Survey of Monetary Analysts;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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