Swedish households are hard hit by rising food prices and high interest rates. But now prices are about to stabilize and many are hoping for lower interest rates.
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Riksbank governor Erik Thedéen holds the baton
But the Governor of the Riksbank Erik Thedéenwho holds the baton regarding the Swedish key interest rate, does not seem to think that it is enough.
Despite the fact that the risk of high inflation is about to disappear, the concern about the weak Swedish currency continues.
Inflation is turning up in the US
Even in the United States, the chances of easing with regard to the key interest rate are decreasing. In March, inflation rose again, to 3.5 percent. This was announced by the US Department of Labor on Wednesday.
It has News24 written about before.
The stable tip was that the US would lower interest rates in June. But now that seems less and less likely.
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Statistics Sweden comes with a report
On Friday, Statistics Norway will release its next report on how Swedish inflation is doing. If prices go up, it could mean another nail in the coffin for the hope that the Riksbank will lower the interest rate in May.
High interest rates ruin for everyone
High interest rates have made it very expensive to borrow money, which lies like a wet blanket over both consumption, the housing market and the business community’s willingness to invest.
All three markets are machines that need cheaper loans like oil to keep the gears turning, so to speak.
The Riksbank does not allow itself to be controlled
Erik Thedéen tries not to let the actions of other central banks determine whether to lower the interest rate and, in such cases, when.
– But we should not link Swedish monetary policy directly to the actions of other central banks. It is inflationary pressure and the prospects for inflation here in Sweden that determine our monetary policy, he says in a speech on the Riksbank’s website.
Weak krone concerns
But a weak krona internationally is worrying. If the krona weakens, the goods we sell abroad become cheaper, which is good for jobs but bad for income.
At the same time, goods that we buy from abroad, which is everything from pharmaceuticals and fuel to packaging and electronics, are becoming more and more expensive. and that can push inflation up again, says Erik Thedéen.
Highest policy rate in 16 years
Right now, the key interest rate is the highest since 2008. At that time, the entire Western world was hit by a serious financial crisis, but the hope is now that we will be on our way out of the serious situation.
The Swedish economy is in dire need of getting lending started again, but it may take some time. If there are any interest rate cuts at all this year, right now is an increasingly less safe card.
USA deterrent example
Even in the US, the chances of an interest rate cut are decreasing. Previously, they had hoped for seven interest rate cuts. Now the outlook for even the most optimistic analysts has been pushed down.
The most likely seems to be one or two rate cuts of 25 basis points each, which equates to 0.25 percentage points.
No reductions at all?
Many analysts do not believe that there will be any rate cuts at all, write The Wall Street Journal. And even if the Riksbank says that they do not want to be influenced by what other central banks do, they keep a close eye on what both the Federal Reserve in Washington DC does.
The bank trick – this is how you can think if you have a mortgage
If you don’t want to take a chance, you can take advantage of the interest rate reduction already now with the bank trick that Nyheter24 has already written about before.
By tying your interest rate for 12 months, you get to take part in the banks’ forecasted interest rate cuts, regardless of whether they occur or not.
Read more about the bank trick here: This is how you get an interest rate reduction right now – with the bank trick
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