{"id":7769,"date":"2022-05-28T11:44:52","date_gmt":"2022-05-28T11:44:52","guid":{"rendered":"https:\/\/gfk-cfs.de\/?p=7769"},"modified":"2022-05-28T11:48:12","modified_gmt":"2022-05-28T11:48:12","slug":"cfs-survey-on-inflation-and-inflation-expectations","status":"publish","type":"post","link":"https:\/\/gfk-cfs.de\/en\/news\/cfs-survey-on-inflation-and-inflation-expectations\/","title":{"rendered":"CFS survey on \u201cInflation and inflation expectations\u201d"},"content":{"rendered":"<h3 style=\"text-align:justify;\"> German financial sector does not believe that inflation rates will normalise in the short term \u2013 calls to abandon expansive monetary policy<\/h3>\n<p style=\"text-align:justify;\"> <strong>Background:<\/strong> <\/p>\n<p style=\"text-align:justify;\"> The inflation rate in Germany is currently around 4%, in the Eurozone around 3%. The question is whether the ECB\u2019s monetary policy, which has been highly expansionary for a number of years, will now actually lead to prices rising in the long term or whether this is a temporary phenomenon triggered by special factors (e.g. a temporary reduction in VAT). Some market observers expect the inflation rate to normalise to around 2% in the course of the first half of 2022. <\/p>\n<p style=\"text-align:justify;\"> Other market observers do not foresee a normalisation in the short term, but point to sharply rising energy prices, rising food prices and rising producer prices due to supply bottlenecks. Even the spectre of impending stagflation (simultaneous occurrence of economic stagnation and inflation) is evoked in some quarters. <\/p>\n<p style=\"text-align:justify;\"> The ECB has announced that net purchases under the Pandemic Emergency Purchase Programme (PEPP), which has a total volume of EUR 1,850 billion, will continue until at least the end of March 2022. <\/p>\n<p style=\"text-align:justify;\"><strong>Survey results:<\/strong><\/p>\n<p style=\"text-align:justify;\">A survey conducted by the CFS among financial industry professionals and managers on the topic of inflation revealed a surprisingly clear picture: 72% of the respondents do not (!) expect the inflation rate to normalise to around 2% by the middle of next year. Accordingly, 87.7% of the panel participants believe that the ECB should abandon its expansionary monetary policy. As many as 88.7% of the respondents believe that the ECB should moderately raise key interest rates in the near future. <\/p>\n<p style=\"text-align:justify;\">\u201cThe call for an end to expansionary monetary policy comes from an overwhelming majority of market participants. The ECB should take this on board,\u201d says Professor Volker Br\u00fchl of the Center for Financial Studies. \u201cBecause the markets have a fine sense for when they are in danger of overheating,\u201d Br\u00fchl continues. <\/p>\n<p style=\"text-align:justify;\">58.7% of respondents continue to see the risk of stagflation \u2013 i.e. the simultaneous occurrence of a stagnating or declining economy and inflation \u2013 while 40.6% do not currently see this as a risk. <\/p>\n<p style=\"text-align:justify;\">Similarly, there is a clear call for an end to negative interest rates (currently -0.5%) on banks\u2019 deposits with the ECB. According to 81.5% of the respondents, these should be discontinued, while 15.4% are in favour of keeping them. \u201cAccording to the overwhelming majority of market participants, it is time to signal the end of negative interest rates,\u201d adds FMF Managing Director Hubertus V\u00e4th. <\/p>\n<p style=\"text-align:justify;\">\n<p style=\"text-align: justify;\">_______________________<\/p>\n<p style=\"text-align:justify;\"> <span style=\"font-weight: bold;\">We would like to thank Frankfurt Main Finance e.V. for financially supporting the project. <\/span><\/p>\n<p><a href=\"https:\/\/gfk-cfs.de\/media\/PM-Index-Q4-2021_eng_Sonderfragen.pdf\" target=\"_blank\" rel=\"noopener\">Press Release (pdf)<\/a><\/p>\n<p><a href=\"https:\/\/gfk-cfs.de\/media\/Praesentation_Q4_2021-1.pdf\" target=\"_blank\" rel=\"noopener\">Presentation (pdf, German)<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>German financial sector does not believe that inflation rates will [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[133,130,116],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.8 - 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