Household expectations shape policy transmission, Vujčić says
ECB Vice-President Boris Vujčić emphasized the strategic value of micro-level consumer surveys for monetary policy transmission during a speech in Berlin on September 1, 2026. He noted that household inflation perceptions directly influence aggregate economic decisions.
Beyond rational expectations
Speaking at ESMT Berlin, ECB Vice-President Boris Vujčić explained that households do not process macroeconomic data like professional forecasters.
Instead, consumer beliefs are widely dispersed and disproportionately shaped by salient daily prices such as food and fuel.
Drawing on research co-authored by Professor Michael Weber, Vujčić pointed out that lived experience, financial literacy and shopping exposure create systematic variations, including a persistent gender gap in inflation expectations.
Direct measurement via tools like the ECB Consumer Expectations Survey allows central banks to track these information frictions rather than inferring beliefs from aggregate outcomes.
Calibrating shocks and communication
Survey evidence directly informs policy during periods of geopolitical tension and cost-of-living shocks.
Vujčić noted that while shorter-term household views fluctuate, longer-term expectations remain anchored around the 2 percent target.
Central bank communication must adapt across environments: explaining simple targets proves most effective during low inflation, whereas high inflation requires clear explanations of central bank responses amid elevated public attention.
A necessary reality check
Central banks long relied on stylized models that ignored how ordinary citizens perceive inflation.
Incorporating granular expectations surveys provides an indispensable reality check for policy design.
However, measuring consumer sentiment accomplishes little if institutions cannot align their communication with public reality.