They have completely different expectations – it's like apples and oranges

The inflation rate continues to fall in Sweden. According to Statistics Sweden (SCB) the CPI for November 2024 was 1.6% compared to November 2023 and the CPIF for the same period is 1.8%, which means that Sweden's central bank AKA the Riksbank once again misses its inflation target of 2%.

Exactly one week after the announcement by Statistics Sweden, the Riksbank announced that it would lower Sweden's policy rate by 25 basis points to 2.5%, which was in line with expectations according to the Swedish newspaper Aftonbladet. According to the Riksbank's press release, the interest rate is being lowered quote "to provide further support to the economy and help stabilize inflation at the target" unquote.

At the same time, the Riksbank points out that the inflation and economic situation remains uncertain due to geopolitical concerns, uncertainties around trade policy and government crises around Europe, which clarifies their strategy of a more restrained strategy regarding future cuts in the policy rate. Unlike the market, which had hoped for hints of more and faster interest rate cuts in early 2025.

AI generated image with Grok