Swedish Interest Rate Hike Surpasses Expectations

September 20, 2022

Officials at the Swedish Riksbank today exceeded street expectations with a policy interest rate hike of a full percentage point to 1.75%. The Executive Board’s statement indicates more hikes are probable during the coming half year and revising projected inflation sharply higher to calendar year averages of 8.6% in 2022, 8.5% in 2023, and 2.2% in 2024. Core CPI is now projected at an average of 8.2% next year versus 9.0% as of last month. Elevated inflation is attributed to a “combination of substantial international cost increases, the effects of high energy prices on other prices and relatively strong Swedish economic activity.” But the statement concedes that assessing the exact evolution of inflation from here remains difficult and promises to adapt policy to a course that brings inflation back to the 2% target by 2025.

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

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