According to reporting by Bloomberg, the Swiss National Bank (SNB) is staring down the barrel of a major decision on interest rates; the last time the SNB raised rates in 2011, it triggered an economic cycle that ultimately culminated in drastic crisis measures.
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Inside and outside the Riksbank, there are now very different views on how and when it should unwind its historic stimulus program. Ten of the 24 economists surveyed by Bloomberg expect the bank to take a first step this week, adding a quarter point to the benchmark repo rate and bringing it to minus 0.25 percent. The rest predict that the board will wait.
The Riksbank’s board has been split over when to take the next step, after halting its quantitative easing program late last year. But with inflation now hovering at the 2 percent target, the board has said it feels confident it can move before the ECB and has signaled a hike will come either in December or February.
For Swedish policy makers, who were derided by Nobel laureate Paul Krugman as “sadomonetarists” for their bias toward tight policy during the financial crisis, raising rates in the current environment may be difficult.
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