"I see it as more likely that the Swedish Central Bank will lower the policy rate once again than that it will raise the policy rate in the near future," says SEB strategist Amanda Sundström.
She does not see any need to tighten the economy by raising the policy rate until the latter part of 2027.
She says it will not be before 2026 in any case, and likely later than that, when the Swedish Central Bank might start raising the key interest rate.
Torbjörn Isaksson, chief analyst at Nordea, is on the same track.
"We maintain our forecast that the Swedish Central Bank will leave the policy rate unchanged going forward. But it is clear there is a greater risk of a rate cut than a rate increase," he says.
Announcement in three weeks
The Swedish Central Bank - which more than halved the policy rate, bringing it to 1.75 percent in 2024 - 2025 - left the policy rate unchanged at its December meeting. The next announcement will come in three weeks, and no changes are expected then.
The key interest rate particularly affects variable mortgage rates.
Inflation according to the CPIF measure fell to 2.1 percent in December, compared with an expected 2.3 percent. Excluding energy prices, CPIF inflation fell to 2.3 percent, down from 2.4 percent in November. Analysts on average had expected an increase to 2.6 percent, which was also the Swedish Central Bank's forecast.
In the spring of 2026, the temporary halving of food VAT is expected to further reduce inflation.
"But now there is low inflation even before we get those measures into the figures. Inflation looks set to be really low in 2026," says Amanda Sundström.
Market interest rates are falling
Swedish market interest rates - especially shorter ones - fell immediately after the preliminary figures from Statistics Sweden (SCB), and the krona lost a few cents against the dollar.
More details about what actually pushed down inflation in December are expected in a more detailed inflation report from Statistics Sweden next week.
The CPIF measure excludes the effects of mortgage interest rates, and it is this measure the Swedish Central Bank uses for its 2 percent inflation target.
