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Riksbank: Rate hike late this year, early next year still in play – Nordea

Mats Hydén, analyst at Nordea Markets, notes that the Riksbank left the repo rate unchanged at -0.25% in its just concluded meeting.

Key Quotes

“The rate path was revised downward, but rate hike by end of year still in play. More hawkish than we expected.”

“The rate path was revised downward, but rate hike by end of year still in play. This is more hawkish than we expected, despite the massive flattening of the path.”

“Probability of rate hike in October has been reduced while probability for hike in December and February has been increased. Total probability for Oct-Feb hike unchanged.”

“Our call for a rate cut in December obviously now stands out as less likely. However, we still think Riksbank is too optimistic on growth and inflation and that it will have to re-think down the road. Still, today’s announcement much more hawkish than we expected.”

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