I hope that Riksbanken starts to act and react

Now in late summer, the real estate market is starting to pick up again after the summer break. There have never been as many one-bedroom apartments for sale as there are now. The more normal interest rate situation compared to previous years' negative policy rate has broken many owners of the smallest apartments. That this group of owners has been hit harder is generally due to the fact that they are more often younger and single borrowers with lower incomes and no profit from previous home sales to fall back on as this is often their first home purchase.

Many of them clearly did not have the margin between an unhealthy negative policy rate that meant for them a monthly interest cost of about $275 to today's more normal monthly interest cost of $775. At the same time, the entire blame cannot be placed on the young and inexperienced borrowers as the former head of Sweden's central bank AKA Riksbanken said as late as April 27, 2021 that Sweden would have a zero policy rate until the summer of 2024. Instead, the then central bank governor Stefan Ingves, as opposed to acting, reacted to the outside world and raised the policy rate as early as May 5, 2022.

Personally, I believe that through its actions Riksbanken has deepened Sweden's current recession and last year's rampant inflation by constantly reacting and not acting. I called for an increase in the policy rate many years before Riksbanken's first increase in the policy rate when I considered it insane to have a negative policy rate during a boom. EVERYONE knows that Riksbanken's measures take time before they are noticed in the economy, therefore it is of the utmost importance that they act and not react.

I heard an interview with Bo Hansson, former employee of Riksbanken, earlier this week who said that if Riksbanken does not make a double cut, i.e. 50 basis points, of the policy rate on Tuesday next week, it is almost a misconduct given all the data they have about Sweden's current economy.

Personally, I think that Erik Thedéen, present central bank governor, wants to show himself strong and independent and thus lowers by 25 points.