This box analyses the revisions in policy rate path expectations observed in the Survey of Monetary Analysts (SMA) and identifies key drivers of these revisions. Amid the interest rate hikes of 2022 and 2023, financial markets and analysts made frequent and sizeable adjustments to their expectations for ECB policy rate levels. SMA participants’ macroeconomic expectations, particularly changes regarding headline inflation and GDP growth, played a significant role in shaping revisions to expectations for deposit facility rate (DFR) levels, especially during the surge in inflation. At the same time, financial market expectations, as reflected in forward rates, accounted for another sizeable share of revisions. Over time, the relative importance of macroeconomic expectations in driving expectations for the policy rate path diminished, with financial market expectations playing a dominant role by 2023.
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