Swedish Riksbank Policy Announcement (Jun) 1.75% vs. Exp. 1.75% (Prev. 1.75%); probability of a hike in 2026 has increased relative to the March assessment

Guidance:

• "The Executive Board assesses that it is well-balanced to leave the policy rate unchanged at 1.75 per cent now, but the probability that the rate will be raised later this year has increased in relation to the assessment in March."
• "The Riksbank bases its forecasts on oil futures prices, which indicate that supply will begin to normalise in the near term and that oil prices will fall. If this occurs, the upturn in import prices and pass-through of the higher costs to consumer prices are expected to be limited. But there is still considerable uncertainty surrounding the forecast."
• "The range of potential outcomes for what can happen going forward is wide and the Riksbank is highly prepared to adjust monetary policy."

Policy Rate Forecasts:

Domestic Economy:

• Inflation in Sweden is still low, largely due to the dampening effects of fiscal policy measures. Economic activity is somewhat weaker than normal and growth was lower than expected in the first quarter. Moreover, the recovery in the labour market is tentative.

Economic Forecasts:

• "The Riksbank’s forecasts and reasoning in the Monetary Policy Report are based on the information available on 11 June. The developments in the Middle East since then, and in particular the Memorandum of Understanding, have thus not been taken into account in the forecasts and reasoning in the report. There is still considerable uncertainty regarding developments and the Executive Board assesses that the report still provides a good basis for monetary policy."