ECB survey adds fuel to rate hike prospects: inflation expectations rise across the board, all above the 2% target.

Zhito Finance APP has learned that the European Central Bank's monthly survey released on Friday showed that euro area households' inflation expectations rose across the board in August adding further support to the tightening bets that are heating up after the second rate hike on September 10. The median one-year inflation expectation rose to 3.0% from 2.9% in July, the three-year expectation rose to 2.9% from 2.7%, and the five-year expectation rose to 2.5% from 2.4%. Among these, the three-year indicator has greater reference value for monetary policy making. All three horizons are above the European Central Bank's 2% target meaning that, even looking only at the household sector's judgment, the idea that "inflation will return to target" is not truly believed within the visible time frame.