a shift in the proportion of participants reporting expected inflation rates above 4 per cent. in line with the literature on household inflation expectations, the most important signal is conveyed by the shift in the distribution of beliefs about future inflation more than the precise level of expected inflation. chart 12 inflation expectations in the ecb consumer expectations survey ( left panel : annual percentage changes ; right panel : annual percentage changes ; percentages of respondents ) sources : ecb consumer expectations survey and ecb staff calculations. notes : “ median ” refers to the median across individual respondents. data is winsorised at the 2nd and 98th percentile. the latest observations are for march 2022. taken together, charts 10 - 12 indicate that there has been a substantial and widespread shift in longerterm inflation expectations since early 2021, largely in the direction of re - anchoring expected inflation at the two percent target. this suggests that the euro area is unlikely to revert to the persistent belowtarget inflation trend that was so entrenched before the pandemic. at the same time, the most recent signals from surveys and market - based measures also suggest that the right tail of the distribution is expanding, which warrants close monitoring. monetary policy in recent years, the monetary stance of the ecb has been determined by a combination of policy measures : the low level of the key policy rates, rate forward guidance, asset purchases and targeted lending operations. the period of very low interest rates for banks in the targeted lending programme ( tltro iii ) is scheduled to end next month. moreover, as shown in chart 13, there has been a very substantial decline in the rate of asset purchases in recent months and the governing council expects to end net purchases under the asset purchase programme ( app ) in the third quarter. chart 13 monthly flow of net purchases under app and pepp ( eur billions ) source : ecb. notes : the chart shows aggregated net purchases for all public and private app and pepp programmes at month - end. the latest observation is for 30 april 2022. the values for may and june 2022 were inferred from the ecb ’ s most recent monetary policy announcement ( 14 april 2022 ). furthermore, as shown in chart 14, there has been a remarkable shift in the yield curve during the initial months of 2022. in part, this reflects the re - pricing of risk premia in the current highly - uncertain environment. in part, it reflects the anticipation of market participants

s mandate to pursue price stability and to contribute to safeguarding financial stability. we stand ready to adjust all of our instruments within our mandate, incorporating flexibility if warranted, to ensure that inflation stabilises at our two per cent target over the medium term. 1. the march 2022 ecb staff macroeconomic projections included adverse and severe scenarios in addition to the baseline projections in recognition of the highly - uncertain impact of the war on the euro area economy and the inflation outlook. 2. adrjan, p. l and lydon, r. ( 2022 ), “ job posting growth stalls in europe ” indeed hiring lab blog, 4 may. 3. see also lane, p. r. ( 2022 ), “ monetary policy during the pandemic : the role of the pepp ”, speech at the paris school of economics, 31 march, lane, p. r. ( 2022 ), “ inflation in the near - term and in the medium - term ”, opening remarks at mni webcast, 17 february and lane, p. r. ( 2022 ), “ bottlenecks and monetary policy ”, the ecb blog, 10 february. 4. wage agreements specify both current and future wage increases and frequently cover 1 - 2 years. the wage trackers reflect the average wage growth among those workers for whom agreements are already in place – the so - called coverage. this coverage is decreasing with the length of the time horizon – as the longer one looks into the future the more agreements will have run out. the experimental wage tracker for the euro area reflects a weighted average of wage increases based on micro data on wage agreements in germany, italy, spain and the netherlands. 5. for more than half of the private sector employees in the euro area, inflation does not play a formal role in wage setting, but can be an important factor in wage negotiations and in some countries there is renewed pressure to introduce or increase the prevalence of indexation clauses. see, for example, ecb ( 2022 ) “ an initial analysis of the impact of inflation on collective bargaining in 2022 ”, bank of spain economic bulletin, issue 1see also ecb ( 2021 ) “ the prevalence of private sector wage indexation in the euro area and its potential role for the impact of inflation on wages ” economic bulletin, issue 7. 6. also substantial increases in minimum wage increases, which are in some countries linked to inflation, can be expected to contribute more