FX krona Markets sweden

We’re All Japan Now: Riksbank Edition

"...our interest rate path, policy rate path speaks its own language."

"Way" back on February 19, we posted something cryptic about the Riksbank. It was called "You Can Forget About Another Hike From Sweden". I'm joking about the "cryptic" part. There was nothing at all ambiguous about that post, which was just as straightforward as its title suggests. Earlier this year, the Riksbank decided to lean slightly hawkish against what was clearly a burgeoning, coordinated dovish pivot from global policymakers and also against weakening inflation. The rate path was unchanged at the February meeting, meaning a September hike was still possible and on top of that, the bank ditched the mandate that had allowed Stefan Ingves to intervene in the FX market (that mandate would have needed to be extended after expiring). At the time, we suggested hawkishness was, at best, unwarranted and, at worst, potentially dangerous. Leaning against the dovish wind risked undermining inflation further and while the krona has been a notoriously poor performer thanks in no small part to the Riksbank's monetary accommodation, adopting a hawkish lean in a world where "elephants" (as Ingves once described the ECB) like Draghi, Powell and Kuroda are shifting to a dovish stance, is
Subscribe or log in to read the rest of this content.

0 comments on “We’re All Japan Now: Riksbank Edition

Speak your mind

This site uses Akismet to reduce spam. Learn how your comment data is processed.