INFLATION MONITOR February 16, 2026 Economic Analysis and Research Department
Inflation in the euro area has been on a downward path since early 2025 moving towards ECB’s target, thanks to negative energy inflation while services and food inflation remain persistent. Inflation in Greece is higher compared to the euro area mainly due to the economy being at a different phase of the business cycle. • • • • • • • •
Inflation in the euro area moved sideways in the course of 2025 and on average stood at 2.1% mainly fueled by services and food inflation. Core inflation for 2025 was 2.4%. In the last few months inflation has been on a downward trend reaching 1.7% in January 2026, a figure below ECB’s target (2%). Inflation in the US was above Fed’s target in 2025 at 2.7% while in January was at 2.5%. Inflation in Greece in 2025 stood at 2.9% with unprocessed food and services inflation being the key contributors, while core inflation was 3.6%. Since early 2025 HICP headline inflation has been on a downward trend albeit with some volatility, reaching 2.9% in January 2026. Wage growth in the euro area and Greece has been moderating but labour-market tightness continues to contribute to persistent services inflation. Energy prices have been on a downward path since early 2025 but in the last few months they rose due to uncertainty related to geopolitical factors. Professional forecasters expect inflation in the euro area in 2026 to drop to 1.8% while for the US they expect it to remain stable at 2.4%. Market-based medium- and long-term expectations for euro-area inflation stand at levels below or very near to 2%. Inflation expectations in the euro area and the US rose somewhat across all horizons, while real yields retreated somewhat. Markets expect stable ECB rates and lower Fed rates until 2026-end. o The ECB has cut rates by a total of 200 bps since June 2024. Market expectations for ECB rates remained broadly stable last month and continue to suggest no change until the end of 2026. o The Fed has lowered the Fed Fund Rate (FFR) by a total of 150 bps since September 2024. Market expectations for 2026 were broadly unchanged over the past month, implying one rate cut of 25 b.p. until June and another cut of 25 b.p until the end of the year.
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