Nordic Bank: Sweden's Central Bank opens the door to further interest rate cuts

On September 25th, Jin10 Data reported that Torbjorn Isaksson, Chief Analyst of Nordea Bank, wrote that the Intrerest Rate path of the Swedish Central Bank indicates that the probability of a 25 basis point rate cut at each of the next three meetings is 100%, but the Central Bank has opened the door to a 50 basis point rate cut in one of the remaining two meetings in 2024. This gave the Swedish Central Bank “room for maneuver in case of unexpected inflationary downturns or other Central Banks taking more action than expected.” Nordea Bank expects that the policy Intrerest Rate will be cut by 25 basis points at each of the next three meetings, and the Intrerest Rate will drop to 2.5% in January. With the drop in inflation, next year’s Intrerest Rate will drop to 2.0%, slightly lower than the Intrerest Rate path of the Swedish Central Bank.