Riksbank: Rate hike late this year, early next year still in play – Nordea

Mats Hydén, analyst at Nordea Markets, notes that the Riksbank left the repo rate unchanged at -0.25% in its just concluded meeting.

Key Quotes

“The rate path was revised downward, but rate hike by end of year still in play. More hawkish than we expected.”

“The rate path was revised downward, but rate hike by end of year still in play. This is more hawkish than we expected, despite the massive flattening of the path.”

“Probability of rate hike in October has been reduced while probability for hike in December and February has been increased. Total probability for Oct-Feb hike unchanged.”

“Our call for a rate cut in December obviously now stands out as less likely. However, we still think Riksbank is too optimistic on growth and inflation and that it will have to re-think down the road. Still, today's announcement much more hawkish than we expected.”