"We have a 'time of trials' ahead of us when it comes to monetary policy. We must test ourselves and carefully analyze what effect the current policy rate and interest rate path fundamentally have on economic development," he said in a speech at Handelsbanken.
He describes the policy rate of 1.75 percent as “somewhat expansionary” and sees an opportunity to continue stimulating the economy without causing excessively high inflation. However, the course of the Iran war plays a decisive role, according to Hjelm:
"The risk of an escalation of the war, with sharp price increases as a result, justifies the likelihood of an interest rate increase during the year."
What do you think?