Now on Thursday, it's time for a new interest rate decision from the Swedish Central Bank. No one expects the Swedish Central Bank to lower the repo rate from the current 2.25 percent. The recent inflation trend and geopolitical uncertainty have instead led to more people ruling out interest rate cuts altogether this year.
One bank, SBAB, is sticking to the notion that there will be another one. However, the cut is being postponed from the previous assessment in August to September.
"Considering that unemployment is at coronavirus levels, that we don't see any clear signs of demand in the Swedish economy picking up, and our assessment of the so-called equilibrium repo rate is lower than the Swedish Central Bank's, we still believe that there may be another interest rate cut this year – but not until after the summer", writes the bank's chief economist Robert Boije in a comment.
The bank's assessment is instead that inflation will fall back to summer levels, assuming a full-scale trade war does not break out.
What do you think?