Riksbank cuts its Rate by 25bps as expected to 3.25% (prev. 3.50%); policy rate may also be cut at two remaining meetings this year, with a 50bps cut possible at one of those meetings; rate expected to be cut at a clearly faster pace than before

RATE

• "It is assessed that the policy rate can be cut at a faster pace than the Riksbank has previously communicated."


• "It also indicates that one or two further cuts may be made during the first half of 2025."

RATE PATH

FORECASTS

Reaction details (08:38)

• In wake of the announcement EUR/SEK spiked higher 11.3019 to 11.3286 before paring back to the 11.31 mark in the minutes after.

Analysis details (08:53)

• As expected, the Riksbank cut its policy rate by 25bps to 3.25% (prev. 3.50%); the kicker at today’s meeting was that the policy rate may be cut at the two remaining meetings this year, with a possibility of a larger 50bps cut at one of those meetings; further out, the path also "indicates that one or two further cuts may be made during the first half of 2025.". This is a dovish shift to the previous verbal guidance, which pointed towards a policy rate of 2.75% by year-end. As such, EUR/SEK immediately spiked higher, but has since pared much of the move; potentially because this guidance is fairly in-fitting with SEB analyst expectations. Going forward, should the progress of core inflation continue to move in-line with the Riksbank forecast, then the likelihood of a 50bps cut increases. Next up, Governor Theeden at 10:00 BST, before the minutes next week; as a reminder the last release was particularly dovish. 

25 Sep 2024 - 08:30- Fixed IncomeImportant- Source: Riksbank