Asset-buying by the Bank of England and Federal Reserve to soften the blow of the financial crisis have only had limited impact on inflation expectations, Bank for International Settlements research showed on Sunday.
Since 2008, the U.S. and British central banks have tried to revive lending and support economic growth by spending billions on government and private sector debt.
This has raised some concern that it is destabilising inflation expectations
But an article by Boris Hofmann and Feng Zhu in the BIS quarterly report, which represents the views of the authors and not necessarily those of the BIS, concluded that the central banks' asset purchase programmes "have probably not been the main driver".
"While short- and longer-term inflation expectation measures displayed sizeable upward movements towards pre-crisis levels during the implementation of asset purchase programmes, the reaction of inflation swap rates on the days of programme announcements suggests that central bank asset purchases were probably not the main driver of these shifts," it said.
The article said it was unclear how other factors, such as fiscal and other monetary policy measures, changing economic conditions or market sentiment affected inflation expectations on the day of the programmes' announcements.
For example, the Fed's and the Bank of England's first programmes, launched in late 2008 and early 2009 respectively, had initially a negative effect on one-year rates of inflation swaps, financial tools that can be used to hedge inflation risk.
BIS economists said this suggested that market participants at first interpreted these announcements as negative news on the near-term inflation outlook before registering their stimulating effects on the economy.
It also may have reflected peculiar movements in inflation swap markets at times of acute financial and economic stress and in response to announcements of entirely novel policy measures, or it could have reflected the effect of other news on the same day the announcements were made, the economists said.
The programme announcements had economically and statistically significant positive effects only on medium- and long-term inflation swap rates in the United States, the analysis suggested.