Riksbank: Pushing it out (again) – Nordea Markets

Andreas Wallström, Research Analyst at Nordea Markets, explains that the Riksbank revised down the rate path somewhat more than Nordea had expected and October is dead, but a rate hike might come in December or February according to the new rate path.

Key Quotes

“As expected the Riksbank did yet another downward revision of its rate path today. However, the downward revision was somewhat larger than we expected.”

“From the press release “unchanged at the monetary policy meeting in October and then raised by 0.25 percentage points either in December or February.” Longer out, the end point was lowered to 1.09% in Q3 2021 (previously 1.15 %).”

“The Governing Board was split in its decision as governor Ohlsson keeps voting for a hike. Also, as in July, governor Flodén made a reservation against the rate path at the short end of the curve where he adocates a signal that also a October is live.”

“We stick to our forecast that the Riksbank will lift its policy rate in Q4 2019, which is the same time as we foresee a first rate hike from the ECB. However, we cannot exclude a rate hike already later this year or early next year.”