The yield on 10-year U.S. Treasury bonds has risen to 5.02 percent. Analysts increasingly believe that the U.S. Federal Reserve (Fed) will raise interest rates in the world's largest economy on Wednesday.
High U.S. interest rates are driving interest rates around the world, including in Sweden. The krona is being pushed down and long-term interest rates are rising.
When U.S. long-term interest rates rise, interest rates in other countries also follow, including Europe. We are also seeing upward pressure on Swedish interest rates, even though the situation in Sweden differs in many ways from what it looks like in the U.S., says Kopelman.
Dependent on the Swedish Central Bank
This development is forcing mortgage banks to adjust interest rates on mortgages with longer maturities - which is hitting households.
Then it is the case that Swedish households borrow more with short maturities compared to, for example, the U.S. This protects Swedish households a little more and makes us more dependent on what the Swedish Central Bank does.
It's not just households that are affected. The business sector is also affected when borrowing costs increase. The world's stock markets are not immune to the interest rate shock either.
This naturally spills over to Swedish households, which are very exposed to the stock market.
What is causing interest rates to continue to rise? Not least the situation in the Middle East and rising energy prices, says Kopelman.
This latest upswing has to do with what's happening in the Middle East. That's putting more pressure on central banks to raise interest rates, she says, continuing:
But it is debatable whether central banks should react this way to a supply shock. This will make it more expensive to live and it will tighten the economy.
Government debt at record level
In the short term, developments in the Middle East will continue to be the most acute concern.
And that this then forces central banks to raise interest rates more aggressively than they would otherwise have intended.
If interest rates are forced to rise even further, it could fuel concerns about countries' ability to manage their national debt. This is particularly true of the United States, which has record-high national debt.
But also France, says Elisabet Kopelman.
