European Inflation Expectations Collapse To New Record Lows

Despite all the ‘promises’, all the ‘whatever it takes’, all the jawboning… actions and words appear unable to shift the world away from its disinflationary spiral that Central Bankers are so afraid of… US forward inflation expectations have cratered in recent weeks (to levels that in the past have triggered money-printing largesse) but it is European forward inflation expectations that have collapsed to record lows leaving Draghi caught between a deflationary rock and a Bundesbank-bating, Treaty-busting sovereign QE hard place that he knows deep-down-inside (given the cleasr evidence from the US and The Fed) simply does not work how it is supposed to (in the textbooks). As Deutsche Bank warned, “QE in Europe will be ineffective, but it will happen anyway – it is the only tool the ECB has to protect its mandate.”

Presenting the death knell of the central banker…