About the Looming De-anchoring of Inflation Expectations in the Eurozone and the ECB’s Room for Maneuver

For some time now, the inflation rate in the eurozone has stayed below the European Central Bank’s inflation target. Data from the Survey of Professional Forecasters shows that average inflation expectations have been revised significantly downwards in recent years, while at the same time the uncertainty surrounding these expectations has increased considerably. This paper discusses the reasons for the looming de-anchoring of inflation expectations and the ECB’s room for maneuver in the context of the coronavirus crisis.