As the first country in Western Europe, the Swiss central bank unexpectedly lowers its key interest rate by 0.25 percentage points, thus not waiting for the big central banks.
In Sweden, voices are now being raised that the Riksbank should follow the same path.
– We have to look at how the Swedish economy and inflation differ from those in the US and Europe, says Robert Boije, chief economist at SBAB.
On Wednesday 27 March, the Riksbank will issue the next interest rate announcement. The expectation is that the bank will follow the larger players; the American Fed, the European Central Bank, the ECB, and the Bank of England. All have chosen to wait with reductions. In Sweden, this would mean that the policy rate remains at 4 percent.
On Thursday, the Swiss central bank unexpectedly chose to lower its key interest rate. The country thus became the first in Western Europe with a reduction after the interest rate shock in 2022-2023. The expectation among analysts was that the policy rate would remain at 1.75 percent and that the central bank would wait until June with a reduction.
“The fight against inflation over the past two and a half years has paid off,” central bank governor Thomas Jordan said in a written statement.
Urges: Do not follow
Now voices are being raised that even the Swedish Riksbank must dare to stick its chin out.
– It is often “Follow John” where smaller central banks follow larger central banks. At the same time, we have our own monetary policy and we have to look at the Swedish economy and inflation differs from those in the US and Europe, says Robert Boije, chief economist at SBAB.
According to the mortgage institute’s new forecast, the key interest rate will land at 2.75 percent before the end of the year.
– We assess that there is room for the Riksbank to lower the policy rate five times this year, starting the first time in May, says Robert Boije.
Fluctuating around four percent
According to SBAB, this would mean that the variable mortgage interest rate will be around four percent at the end of 2024.
– I think you should pretty much expect that there will be a number of interest rate cuts this year, we see that inflation is falling quite broadly now.