Swedish central bank: 'Interest rates appear to have peaked'
Interest rates have likely peaked in Sweden, the deputy governor of the country's central bank, Per Jansson, told an audience at Swedbank in Stockholm.
“Inflation is continuing to look good, and recent outcomes in Sweden and abroad reinforce my opinion that inflationary pressures are really on the way down. This is very pleasing and important, so that Swedish citizens can regain their purchasing power,” Jansson said.
Experts predict that new figures next week will put Swedish inflation close to the Riksbank's two-percent target, which makes it even more likely that the bank will this year start to lower the country's main interest rate – the so-called policy rate – from its current 4.0 percent.
The bank is expected to announce its next decision at the end of the month.
"I said at the November meeting that it is clear that inflationary pressures are now really slowing down. I think the recent developments confirm this picture. This also reinforces my earlier observation that interest rates appear to have peaked," said Jansson.
"It's clear what direction things are going in, and it's not indicating that we should raise the interest rate further," he told journalists after the seminar at Swedbank.
He explained that there had been a series of indications that inflation was slowing in October, and the evidence for a slowdown in inflation figures has only become stronger since.
New inflation figures for December will be released on January 15th, which Jansson said would be important in confirming the downward trend.
CPIF inflation, the measurement used by the central bank, is expected to stand at 2.2 percent in the new figures, a drop from 3.6 percent in November and just above the bank's inflation target of 2.0 percent.
Just over a year ago, CPIF inflation was over 10 percent.
Some economists are speculating that the key interest rate could be lowered as many as five or six times this year, reaching 2.5 or 2.75 percent by the end of the year.
Jansson did not want to comment on how reasonable these predictions were.
"It's a welcome change that things look better now with regard to how inflation is developing. I think that's central and important."
"But the future is always uncertain," he added. "The situation in Sweden and abroad is difficult to assess and we need to be prepared for inflation to be both higher or lower than in our forecast and to adjust monetary policy accordingly."
Late last year, experts were predicting that mortgage rates will start to drop around summer 2024.
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“Inflation is continuing to look good, and recent outcomes in Sweden and abroad reinforce my opinion that inflationary pressures are really on the way down. This is very pleasing and important, so that Swedish citizens can regain their purchasing power,” Jansson said.
Experts predict that new figures next week will put Swedish inflation close to the Riksbank's two-percent target, which makes it even more likely that the bank will this year start to lower the country's main interest rate – the so-called policy rate – from its current 4.0 percent.
The bank is expected to announce its next decision at the end of the month.
"I said at the November meeting that it is clear that inflationary pressures are now really slowing down. I think the recent developments confirm this picture. This also reinforces my earlier observation that interest rates appear to have peaked," said Jansson.
"It's clear what direction things are going in, and it's not indicating that we should raise the interest rate further," he told journalists after the seminar at Swedbank.
He explained that there had been a series of indications that inflation was slowing in October, and the evidence for a slowdown in inflation figures has only become stronger since.
New inflation figures for December will be released on January 15th, which Jansson said would be important in confirming the downward trend.
CPIF inflation, the measurement used by the central bank, is expected to stand at 2.2 percent in the new figures, a drop from 3.6 percent in November and just above the bank's inflation target of 2.0 percent.
Just over a year ago, CPIF inflation was over 10 percent.
Some economists are speculating that the key interest rate could be lowered as many as five or six times this year, reaching 2.5 or 2.75 percent by the end of the year.
Jansson did not want to comment on how reasonable these predictions were.
"It's a welcome change that things look better now with regard to how inflation is developing. I think that's central and important."
"But the future is always uncertain," he added. "The situation in Sweden and abroad is difficult to assess and we need to be prepared for inflation to be both higher or lower than in our forecast and to adjust monetary policy accordingly."
Late last year, experts were predicting that mortgage rates will start to drop around summer 2024.
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