Riksbank Lowers Policy Rate as Inflation Approaches Target and Economy Slows

The Riksbank has announced a 25-basis point reduction in its key policy rate to 3.75%, aligning with market predictions. This move comes as inflation approaches the target level and economic activity remains subdued. If inflation forecasts hold, there's potential for two more rate cuts in the latter half of the year.

Inflation is currently nearing the target and is anticipated to remain stable even in the medium term, though there's some uncertainty in the forecast. While Swedish GDP growth has been slow, there is a clear expectation for a gradual improvement. However, the labor market is projected to continue weakening for the foreseeable future.
The next monetary policy announcement will be published on 27 June 2024.

Source: Riksbank