50-Basis Point Interest Rate Hike at Swedish Riksbank

June 30, 2022

As expected and in the face of its highest inflation in over 30 years, the Executive Board at the Swedish Riksbank intensified the speed of stimulus withdrawal. The policy interest rate, which from a negative 0.50% base, had been raised by 25 basis points each in December 2018, December 2019 and April 2022, was hiked by 50 basis points to 0.75%. Forward guidance now anticipates the rate rise to nearly 2.0% during the second half of 2022. Officials also agreed to purchase bonds during 2H 2022 at only half the projected amount indicated after April’s policy review. Core inflation is projected to slow from almost 7% this year to 2% by 2024, and officials are “prepared to raise the policy rate faster if this is needed to ensure that inflation returns to the 2% target.”

Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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