Central Bank Economist: Central Bank Cuts Interest Rate Too Late

Good, but too late, is the comment of trade union economist Tobias Brännemo on the Swedish Central Bank's interest rate decision. That such a large reduction is coming now is a clear sign that the Swedish Central Bank realizes that they lowered too little earlier.

» Published: November 07 2024

Central Bank Economist: Central Bank Cuts Interest Rate Too Late
Photo: Anders Wiklund/TT

This was good, right decision. But also a sign that they started too late, says the Union's chief economist Tobias Brännemo.

The weak economy, which has become weaker than many analysts, including the Swedish Central Bank, had expected, needs an extra boost from a lower interest rate. This situation could have been avoided if the interest rate cuts had started earlier and not taken unnecessary pauses along the way, according to Brännemo.

Signal to households

The signal value to households is still strong, Christmas shopping can be an important injection.

Hopefully, the economy will lift in the near future, he says.

Nordea's chief analyst Torbjörn Isaksson notes that the Swedish Central Bank is sticking to its previous forecast - that the interest rate will drop to 2.25 percent during the second half of 2025. He is also sticking to his assessment, but lower than the Swedish Central Bank, which means that Nordea is counting on three cuts to 2.00 percent by May.

Many analysts welcome the double cut, but there are doubters.

Inflation may rise

Lars Kristian Feste, rate chief at Lannebo Capital Management, believes that a 25-point cut would have been better.

The Swedish Central Bank has a little too little patience. There are not such big signs of weakness in the Swedish economy, he says to TT.

Feste assesses that a new cut, this time by 0.25 percentage points, is highly likely in December. At the same time, inflation may rise in 2025.

We assess that the Swedish economy will get a real boost during the second half of the year. If you combine that with what happens in the US with fiscal policy after the election, it can make inflation rise, he says.

Handelsbanken's economists believe that there will be two more cuts, in December and January, but that the interest rate will then bottom out at 2.25 percent.

Tags

TTT
By TT - Translated and adapted by Sweden Herald under license from TT

More news

Easter Eggs Evolve: More Companies
1 MIN READ

Easter Eggs Evolve: More Companies Join the Festive Trend

Survey Reveals Workplace Silence Affects
1 MIN READ

Survey Reveals Workplace Silence Affects One in Seven Employees

Swedes to Spend Nearly a
3 MIN READ

Swedes to Spend Nearly a Billion Kronor on Easter Candy

Indonesia to Boost Oil and
1 MIN READ

Indonesia to Boost Oil and Gas Imports from USA to Ease Trade Tariffs

European Stocks Gain Popularity as
3 MIN READ

European Stocks Gain Popularity as Investors Shift Focus from US

Asian Markets Show Mixed Movements
1 MIN READ

Asian Markets Show Mixed Movements as Investors Eye US Tariff Talks

Netflix Surpasses Market Forecasts with
1 MIN READ

Netflix Surpasses Market Forecasts with Strong Quarterly Earnings

United Health's Sharp Decline Weighs
1 MIN READ

United Health's Sharp Decline Weighs on Wall Street Indices

Civil Servant Strike Averted as
2 MIN READ

Civil Servant Strike Averted as New Agreements Reached

IMF Predicts Global Economy to
1 MIN READ

IMF Predicts Global Economy to Sidestep Recession Despite Trade Strains

Judge Rules Google Maintains Illegal
1 MIN READ

Judge Rules Google Maintains Illegal Monopoly in Digital Advertising

Electricians Secure New Deal with
1 MIN READ

Electricians Secure New Deal with Pay Raises and Shorter Hours

US Economy Shows New Signs
2 MIN READ

US Economy Shows New Signs of Weakness with Housing and Manufacturing Slumps

Jonathan Anderson Named Dior Menswear
1 MIN READ

Jonathan Anderson Named Dior Menswear Creative Director

Eli Lilly Shares Surge After
1 MIN READ

Eli Lilly Shares Surge After Promising Weight Loss Pill Results

ECB Lowers Rates Again, More
3 MIN READ

ECB Lowers Rates Again, More Cuts Expected This Year

Study Reveals Long-Term Economic Strain
1 MIN READ

Study Reveals Long-Term Economic Strain for Russia in Ukraine Conflict

Trump Claims He Can Oust
2 MIN READ

Trump Claims He Can Oust Fed Chair Powell Despite Lacking Authority

Hermes Increases U.S. Prices to
1 MIN READ

Hermes Increases U.S. Prices to Offset Tariff Impact

Trump Administration Halts New York
1 MIN READ

Trump Administration Halts New York Offshore Wind Farm Construction

Genre image
1 MIN READ

Pernod Ricard Sales Dip Due to Cognac Challenges in China

TSMC Reports Strong Q1 Results
1 MIN READ

TSMC Reports Strong Q1 Results with 42% Sales Increase

ABB Gains Despite Downturn in
1 MIN READ

ABB Gains Despite Downturn in Stockholm Stock Exchange

ABB Boosts Profit, Plans Robotics
2 MIN READ

ABB Boosts Profit, Plans Robotics Division Spin-Off

Asian Markets Rise on Positive
1 MIN READ

Asian Markets Rise on Positive US-Japan Trade Talks

SBAB Predicts Decline in Mortgage
1 MIN READ

SBAB Predicts Decline in Mortgage Rates as Repo Rate Expected to Drop

Trump Reports 'Great Progress' in
2 MIN READ

Trump Reports 'Great Progress' in Trade Talks with Japan

Nvidia's Warning Sends Wall Street
1 MIN READ

Nvidia's Warning Sends Wall Street Indices Tumbling

EU Launches Safety Sweep to
1 MIN READ

EU Launches Safety Sweep to Tackle Dangerous Products Online

WTO Report: Trump's Tariffs Could
1 MIN READ

WTO Report: Trump's Tariffs Could Cut Global Trade by 1.5% by 2025

Record Restaurant Bankruptcies in March
1 MIN READ

Record Restaurant Bankruptcies in March Highlight Industry Struggles

US Retail Sales Surge in
1 MIN READ

US Retail Sales Surge in March, Driven by Car Purchases

Northvolt's Acting CEO Pia Aaltonen-Forsell
1 MIN READ

Northvolt's Acting CEO Pia Aaltonen-Forsell Steps Down

California Challenges Trump's Tariffs in
1 MIN READ

California Challenges Trump's Tariffs in Court, Citing Illegality

Social Democrats Propose Boost in
2 MIN READ

Social Democrats Propose Boost in Support for Single Parents

Autoliv Navigates Trade Tariffs with
3 MIN READ

Autoliv Navigates Trade Tariffs with Strong First-Quarter Performance