Battle of egos

In connection with the Swedish central bank's latest monetary policy decision when they chose not to raise the key interest rate, central bank governor Erik Thedéen warned that further increases may come.

Following this warning, a senior economist, Robert Bergqvist, from one of the largest Swedish commercial banks, SEB, has spoken in the media. Mr Robert Bergqvist does not believe the central bank's warnings about further increases. On the contrary, he believes more in a reduction of the key interest rate already next year, in contrast to the central bank's announcement that a reduction could come in the second half of 2025 at the earliest.

The governor of the central bank talks about a "Table Mountain", i.e. an interest rate path that has risen rapidly and will remain at that level before falling again. The senior economist speaks more of a "Matterhorn", i.e. a rapid increase followed by a rapid decrease.

Mr Robert Bergqvist does not believe that we will get a zero interest rate again, but rather a key interest rate of 2-2.5%. I sincerely hope he is right, a zero interest rate is a clear sign of a crisis situation in the economy.