Inflation Expectations Decline, Signaling Potential Rate Cuts

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Inflation Expectations Decline, Signaling Potential Rate Cuts
Photo: Lars Schröder/TT

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Inflation expectations are falling. It's good news for those who hope for lower interest rates.

Actors on the interest rate market believe that inflation will land at 2.1 percent in a year's perspective, according to the measure that is cleared for interest rate changes and which the Swedish Central Bank uses in its interest rate decisions.

In April, the prognosis was at 2.2 percent, according to the monthly measurements of Origo Group on the Swedish Central Bank's commission.

Even in the longer term, respectively five years, inflation expectations are falling by around 0.2 percentage points down to around the Swedish Central Bank's goal of 2.0 percent.

Monetary market actors believe that the Swedish Central Bank in a year's time has lowered the repo rate to 1.8 percent on average.

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By TTEnglish edition by Sweden Herald, adapted for local and international readers

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