Survey of market expectations

Reliable measures of inflation expectations are essential for both research and the conduct of forward-looking monetary policy. Financial market agents’ expectations are highly important for this. In order to gain a better overview, the Central Bank began at the start of 2012 to carry out quarterly surveys of market agents’ expectations concerning a range of economic variables, including inflation and interest rates.

The survey is sent out to approximately 35 financial market participants: fund managers, research departments, pension funds, securities firms, licensed asset management firms, and insurance companies. The Bank uses results of the survey for both research and monetary policy conduct. The results are also posted on the Bank’s website and are therefore accessible to market agents and the general public.

The market expectations survey falls into three sections. The first section is devoted to questions on short- and medium-term expectations, and the second focuses on long-term expectations. Respondents are asked about their expectations concerning twelve-month inflation, the EURISK exchange rate, the Central Bank’s collateralised lending rate, nominal interest rates, and real interest rates. The third section focuses on respondents’ opinion of the Central Bank’s monetary stance. Additional questions may also be asked at the end of the survey. These questions are not necessarily bound to a given topic, but they concern issues that the Central Bank considers important for research and the conduct of monetary policy at the time in question.

The Central Bank’s expectations survey is conducted four times a year, prior to the publication of each issue of Monetary Bulletin – generally around the middle of each quarter. The survey is conducted digitally. It is typically sent out on a Monday, and the response deadline is on the following Wednesday. A short response time is specified in an attempt to avoid publication of new information just prior to the response date and ensure that all respondents’ answers are based on comparable information. Survey participants’ responses are treated as confidential.
The Bank publishes the results of the surveys on its website in accordance with a predetermined publication schedule. The results include the mean and median responses for each question, plus the standard deviation of responses; therefore, they should provide a clear indication of market agents’ expectations.

Further information on the objectives and execution of the market expectations survey can be found in the Bank's Informational Reports.