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Bad news again for the ECB today, and I'm not talking about the IFO but the Survey of Professional Forecasters. Inflation expectations down for the first time in close to two years. (1/n) 
The distribution of inflation expectations is shifting in the wrong direction, with probabilities of 'low-flation' or even deflation on the rise again. (2/n)
Now the dis-anchoring of inflation expectations doesn't happen overnight. QE has helped 're-anchor' expectations over the past three years (chart based on this paper ecb.europa.eu/pub/pdf/scpwps…).
The ECB will do whatever is necessary to safeguard this. (3/n)
The ECB will do whatever is necessary to safeguard this. (3/n)
The problem is that the ECB's most depressing chart got even more depressing. Long term growth expectations have fallen to an all-time low of 1.5%.
It's all very simple in the end - we need stronger growth to escape velocity. (4/4)
It's all very simple in the end - we need stronger growth to escape velocity. (4/4)
