The paper presents an estimate of the direct effects of the main monetary policy announcements relating to the Eurosystem's expanded asset purchase programme on medium-term inflation expectations in the euro area, measured using the answers from the ECB Survey of Professional Forecasters.
The results of the analysis indicate that the initial announcement of the asset purchase programme led to a significant upward revision of inflation expectations of private forecasters. Specifically, when controlling for concurrent macroeconomic and financial news:
- the median inflation expectation for inflation in two years' time of the forecasters interviewed for the ECB's Survey of Professional Forecasters rose by about 20 basis points;
- the risk of remaining in a low inflation regime - measured by the median probability that inflation in two years' time will be lower 1 per cent - decreased by around 10 percentage points;
- the impact on inflation expectations was also more marked for those of forecasters who had been more accurate in the past in their forecasts for price developments.
