Capturing inflation expectations (de-)anchoring and what survey-based metrics are telling us

This box assesses the anchoring of longer-term inflation expectations following the recent energy price shock using level, higher-moment and shock-sensitivity measures from surveys of consumers, firms and professional forecasters. A holistic approach reflecting the structurally different expectation patterns, uncertainty levels and biases of these different agents yields three main findings. First, level anchoring broadly holds, as the longer-term expectations of professional forecasters remain at 2%, while firms and consumers have revised their expectations upwards only modestly and still largely view the recent increase in inflation as temporary. Second, disagreement and high inflation tail risks remain contained relative to 2022-2023 peaks, although signals are weaker for consumers and firms than for professional forecasters. Third, while consumers (unlike professional forecasters) tend to revise longer-term expectations alongside short-term ones, longer-term expectations have not become more sensitive to short-term expectations since the outbreak of the war in the Middle East. Overall, longer-term inflation expectations appear to be broadly anchored but warrant continued close monitoring. JEL Classification: E31, E52, E66, D84