SWEDEN’S central bank may lower its key policy rate in the first six months of 2024 as inflation pressures have eased, with a cut in May or June more likely than in March, Riksbank deputy governor Per Jansson said on Thursday (Feb 8).
“At the moment, I see it as clearly more realistic that the rate will be cut at the meeting in either May or June,” he said in the summary of a speech published on the central bank’s website.
For a cut to come into question in March, inflation needs to keep slowing and rate-cutting plans from major central banks will probably also need to be outlined much more clearly, he said.
At its Feb 1 meeting, the central bank held the policy rate unchanged at 4 per cent, but said rate cuts could come much earlier than the forecast it gave in November, when it expected no change before 2025.
However, the central bank also said it would proceed cautiously, a message repeated by Jansson, who said that even after the first policy easing, the central bank “will most likely… need to make pauses in the rate cuts to await more information and allow uncertainty to dissipate”.
Markets are pricing in a chance of a cut by June, and for the policy rate to be cut a further two or three times. REUTERS
