A weak economy motivates the interest rate cut, according to Erik Thedéen.
It was suitable to make an interest rate cut now, he says, referring to the fact that the Swedish Central Bank previously flagged a cut during the first half of 2025.
But he does not want to flag many more cuts. Monetary policy must be given time to take effect, which takes time and requires patience to wait for the effects of the interest rate cuts so far.
The overall picture is that inflation pressure is in line with the target.
"Sharp turns"
American monetary policy plays a role, according to the central bank governor. There, the number of cuts by the US central bank Federal Reserve (Fed) has changed rapidly as the economy is strong, the inflation risk remains, and the budget deficits are large.
There have been quite sharp turns, says Erik Thedéen.
The development has particularly affected American long-term interest rates, which affect the interest rate situation in the entire global financial system. The dollar has also strengthened, even against the krona – which has been stable against the euro for a while.
The Swedish Central Bank lowers the repo rate by 0.25 percentage points to 2.25 percent. But the message is that the forecast for the repo rate from December remains and that changes in inflation and economic outlook are required for it to become relevant to go even lower with the repo rate.
"The lower interest rate will gradually provide an increasingly clear positive contribution to demand in the Swedish economy", writes the Swedish Central Bank in its press release.
Great uncertainty
The major concerns going forward are mainly about the development on an international level.
It's a pretty complex world we have, says Thedéen.
Not least the geopolitical situation, but also what happens and occurs in the US plays a major role.
It has long-term potentially quite large effects on how economies will be able to function, he says.
The reactions on the interest rate and currency markets to the interest rate decision – which comes without the Swedish Central Bank presenting a new monetary policy report – were barely measurable.
