·         The public’s inflation expectations are known to have a significant effect on the economy and on monetary policy.  One of the main challenges for monetary policy is to anchor the public’s medium- and long-term expectations within the target range.

·         The anchoring of inflation expectations reflects the public’s trust in the central bank’s ability to achieve price stability in the medium-to-long term, and attests to the bank’s ability to maintain expectations within the target range.

·         An examination of the anchoring of inflation expectations derived from the capital market in Israel during the sample period from January 2003 to November 2021 shows that long-term (5–10 year) expectations during the sample period were almost completely anchored, and that medium-term (3–5 years) expectations were completely anchored, during most of the period.

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