BREAKING: interest rates in Sweden unchanged 📃

• As expected, the Riksbank kept interest rates unchanged at 3.75%. 

Riksbank Statement

• The Riksbank expects inflation to be 2.0% this year, against a previous forecast of 2.3%. Inflation in 2025, on the other hand, is expected to be at 1.8% against a previous forecast of 1.9%.

• GDP is estimated at +1.1% against an earlier forecast of 0.3% in 2024, while for 2025 it is estimated at 1.7% against an earlier forecast of 1.9%

Inflation is aligning closely with the target and economic activity remains subdued. The Executive Board has opted to maintain the policy rate at 3.75%, reflecting stable inflationary pressures and confidence in long-term inflation targets, with expectations of moderate wage increases. Despite favorable trends, such as inflation excluding energy prices falling to 3%, recent data shows a slight uptick above expectations, suggesting potential volatility. Given this backdrop, the policy rate might be reduced two or three times in the latter half of the year if current inflation projections hold, though uncertainties related to external inflation, geopolitical tensions, currency fluctuations, and domestic economic recovery could affect future rate expectations.

EURSEK (M30)

EURSEK rebounds after the decision.