The shift in pricing is clear compared to a week ago. Then, there was only a decrease in the interest rate priced in ahead by the actors in the interest market, according to a report from the major bank SEB.
Clear and broad decline
Now, the pricing indicates a first decrease in August or September and a second at the end of 2025 or the beginning of 2026.
Weak retail trade in May – the largest decline in a month since 1994 – and an unexpectedly gloomy barometer from the National Institute of Economic Research have affected the market's view of the need for interest rate stimuli, according to Amanda Sundström, interest rate and currency strategist at SEB.
It's a clear decline and it's broad, she says about the retail trade figures from the Swedish Central Bureau of Statistics (SCB).
This reflects the decline we have seen in consumer confidence, she adds.
Additionally, producer prices and companies' price plans have been dampened in recent times – which points to a lower inflation rate ahead.
The Swedish Central Bank has in its own interest rate prognosis a probability of around 50 percent that there will be a decrease to. But several members were, according to last week's protocol from the interest meeting on 17-18 June, not entirely unfamiliar with the idea that it may become relevant with more interest rate stimuli than that ahead.
If inflation is not an obstacle, there is no reason for the Swedish Central Bank not to provide a little extra support to the economy, says Amanda Sundström and points out three members who warn that inflation may be lower than expected.
Downward also for long rates
SEB expects a decrease in the interest rate, probably in September.
But the probability of both earlier and more decreases has increased over the past week, says Sundström.
It also points downward for long Swedish market interest rates, which can increase the downward pressure on mortgage rates with longer maturities.
Partly, long rates follow the short rates downward. But they are also heavily influenced by the interest rate situation in the USA, which is being pushed downward as concerns about inflation due to the Trump administration's tariffs have decreased – while concerns about weak growth persist.
Joakim Goksör/TT
Facts: Thousands to be earned on lower interest rates
TT
Variable mortgage rates – which currently hover around 3 percent – often follow the Swedish Central Bank's interest rate, both up and down. If the interest rate on a mortgage of three million kronor were to be reduced by 0.50 percentage points – that is, equivalent to two normal decreases in the interest rate – it would reduce the cost of a mortgage of three million kronor by 15,000 kronor per year or 1,250 kronor per month, if one disregards the effects of interest deductions. The Swedish Central Bank previously lowered the interest rate in June by 0.25 percentage points to 2.00 percent. The decrease was the seventh in just over a year and the interest rate is thus at its lowest level since the autumn of 2022. In its interest rate prognosis, the Swedish Central Bank stated a probability of around 50 percent for an interest rate decrease to this year.
