On Wednesday evening, Swedish time, the United States’ central bank, the Federal Reserve, came up with the year’s last interest rate announcement. The policy rate is left unchanged in the range of 5.25–5.50 percent.
– I am relieved that the announcement came in line with expectations, says Swedbank’s head of forecasting, Andreas Wallström.
During Wednesday evening Swedish time, the US central bank Federal Reserve, Fed, came with the last interest rate announcement of the year.
As expected, the central bank left the policy rate unchanged in the range of 5.25–5.50 percent. The Fed expects at least three rate cuts in the next year.
– This is yet another sign that the global interest rate peak has been reached, says Swedbank’s head of forecasting, Andreas Wallström.
The announcement means that the Fed is keeping interest rates unchanged for the third meeting in a row.
– It has been a number of months that the Fed has chosen not to raise interest rates. We estimate the next step will be a reduction in June next year, says Wallström.
The last time the central bank raised the interest rate was in July. The 5.25-5.50 range is the highest level in 22 years.
This is how the Swedish economy is affected
The Fed’s announcement is important for the Swedish economy in several respects, according to Andreas Wallström.
– The US is the world’s largest economy and certainly the world’s largest for the financial market. What they do very much controls the development of the stock market, he says.
It has a direct impact on many Swedish households, says Wallström.
– This affects, among other things, mortgage interest rates.
But he adds that even if the Swedish Riksbank looks at what other central banks are doing, the US announcement is not entirely decisive for the next interest rate announcement in Sweden.
His assessment is that the Riksbank, like the US central bank, will cut interest rates in June.
– Inflation has clearly come down already now and continues to fall. There are also clearer signs that the economy is slowing down.
– It is simply starting to be time to ease monetary policy and tighten the economy less.