A key indicator of long-term eurozone inflation expectations dropped below 2% on Tuesday, marking the first time since July 2022. This shift suggests that investors believe slowing economic growth could lead inflation to fall short of the European Central Bank’s target. The five-year, five-year forward inflation swap declined to 1.9994%, according to LSEG data, a notable decrease from levels above 2.2% in October. This metric reflects investors’ inflation expectations for a five-year period starting five years from now.
