ECB Survey Reveals Stable Inflation Perceptions, Rising Unemployment Expectations

Concerns about a potential recession in the United States have intensified following disappointing economic data, including a decline in the manufacturing PMI and job openings, which has contributed to a bearish sentiment on Wall Street. Investors are particularly anxious about impending tariff announcements from the Trump administration, fearing that trade wars could exacerbate stagflationary pressures. In the backdrop, the European Central Bank's recent Consumer Expectations Survey revealed stable inflation expectations among euro area households, but a slight drop in perceptions of past inflation, suggesting a cooling of price pressures. Despite this, consumer sentiment remains pessimistic regarding economic growth, with households projecting a modest contraction. This uncertainty is influencing stock market volatility, as analysts warn that current conditions may not favor a stock market rebound. The overall economic landscape reflects a mixture of cautious optimism regarding income growth against a backdrop of rising inflation expectations and declining consumer confidence.