9.19.2024

I hope I'm wrong again

Yesterday's double policy rate cut by the Federal Reserve (FED) combined with the last two months' Swedish inflation rates puts a lot of pressure on the Swedish central bank AKA Riksbanken to follow in the FED's footsteps with a double interest rate cut next week. Unlike Riksbanken, the FED seems to have listened to "its market" about not pushing the economy all the way to the end.

Since the central banks' actions take time before they come into effect, the FED feels significantly more proactive than Riksbanken, which in my opinion is responsible for Sweden's decline being deeper compared to if Riksbanken had acted instead of reacting.

Personally, I don't think Riksbanken has big enough conjon** for a double cut next week, but I've been wrong before, most recently yesterday.

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