Anchored or de-anchored? That is the question

Using a variety of approaches, this paper shows that long-term inflation expectations have de-anchored from the ECB’s inflation aim. The long-term expectations reported in the ECB Survey of Professional Forecasters have not regained the levels that prevailed before the 2013-14 disinflation. Long-term expectations have also become sensitive to short-term expectations and to negative surprises to inflation. Forecasters who participated in most of the survey rounds were highly sensitive to short-term developments in inflation. •Well-anchored long-term expectations are a sign of credibility of central banks.•Long-term inflation expectations have disanchored from ECB’s inflation aim.•Inflation expectations have become sensitive to negative inflation surprises after 2013.•Forecasters who participated in most survey rounds have more disanchored expectations.•A clear-cut and symmetric inflation target may contribute to reanchoring expectations.