"I have to agree, it's difficult to navigate now," says Nordea's chief analyst Torbjörn Isaksson.
He thinks it is natural to wait and see regarding the interest rate at this point, as the policy rate is still at a normal level and inflationary pressures were low before energy prices started to skyrocket.
He interprets the Swedish Central Bank's message as showing great readiness to act.
Don't run too fast.
Mattias Persson, chief economist at Swedbank, thinks it's a good idea to wait.
There is no reason to move too quickly. We need to see where this is going, what the effects will be and what will weigh most.
If energy prices cause inflation to rise, then an interest rate hike is imminent. But if the economy slows down sharply, a rate cut may be needed to stimulate demand.
It is good that the Swedish Central Bank communicates both options, says Persson.
The Swedish Central Bank is also leaving the so-called interest rate path, the forecast for the policy rate, unchanged compared with the December meeting. However, the Swedish Central Bank has sharply lowered the growth forecast for this year to 2.5 percent, down from 2.9 percent in December.
Dramatic development
"The war in the Middle East makes the forecast very uncertain. The Swedish Central Bank is monitoring developments closely and will adjust monetary policy if the inflation and economic outlook require it," writes the Swedish Central Bank, which warns that there could be both a reduction and an increase depending on the effects on the economy.
The Swedish Central Bank describes the development as dramatic and notes large movements in energy prices and in financial markets.
"It is still unclear what the more lasting consequences will be, both geopolitically and economically, and conditions can change quickly," the Swedish Central Bank further writes.
Torbjörn Isaksson does not believe a rate cut is currently on the table, but that there will be no increase either, at least not in the near future.
Market reactions were barely measurable immediately after the interest rate announcement. The krona strengthened slightly against the euro and the dollar, while market interest rates remained unchanged.
