The European Central Bank (ECB) has released its Consumer Expectations Survey for February 2026, revealing that consumer inflation perceptions and expectations are stabilizing amid geopolitical tensions. Notably, median inflation expectations for the next 12 months decreased slightly to 2.5%, while perceptions of inflation over the past year remained unchanged at 3.0%. This survey, conducted primarily before the outbreak of conflict in the Middle East, indicates that consumers are adjusting their outlook on economic growth and unemployment, with expectations for the unemployment rate dropping to 10.8%.

These findings are significant for financial markets as they suggest a potential easing of inflationary pressures, which could influence ECB monetary policy decisions. The stability in consumer spending growth expectations, now at 3.5%, alongside a less negative outlook for economic growth, may support a more favorable environment for equities, particularly in consumer discretionary sectors.

Market professionals should closely monitor the upcoming CES results in April for further insights into consumer sentiment and its implications for inflation and economic activity, especially in light of recent global events.

Source: ecb.europa.eu