Riksbank Minutes (Apr 27): Deputy Governor Bremen says in her opinion, the rate path indicates too many increases over the forecast horizon given the current information

INGVES:

• I feel that the rate hikes included in the repo-rate path do not mean that monetary policy changes over to being contractionary.


• If inflation continues to surprise on the upside, monetary policy may need to be tightened further.


• The focus is now on ensuring that the high inflation rates we are currently observing do not persist

BREMEN

• It is better to slow down now than risk having to slam on the brakes late.


• I did not enter a reservation against our forecast or against the rate path; however, in my opinion, the rate path indicates too many increases over the forecast horizon given the information we currently have

FLODEN

• Could have proposed a flatter repo path, with a greater probability of two rather than three hikes. But, cannot rule out the possibility that they may need to raise rates faster.

JANSSON

• To be sure, the upward adjustment to the repo-rate forecast now being made is not insignificant but still relatively cautious, bearing in mind the magnitude of the rate hikes during previous rate-hike cycles and, above all, the inflation situation we have to cope with this time.

SKINGSLEY

• By gradual rate hikes, we are now strengthening the possibilities for better economic development in the longer perspective.

OHLSSON

• As I see it now, the repo rate needs to be a couple of percentage points higher in a few years’ time. At the same time, I think that if we begin to act in time, there is also a possibility to adapt monetary policy gradually.

Via Riksbank

Analysis details (08:50)

• In-spite of the unanimous decision, but very much in-fitting with previous accounts, there are numerous different views within the Minutes. Unsurprisingly, Governor Ingves is very much in-line with the announcement. More interestingly is Breman, while not entering reservations against the repo path, noted that it is in her view too hawkish based on current information; pointing to growth prospects being on the downside.


• On the flip side, is Jansson. Who regards the upward adjustment as not insignificant but still relatively cautious. 


• Overall, the tone of the minutes is mixed and points to likely revisions to the repo path in the meetings ahead alongside potential for members to enter reservations in relation to it and possible on rate announcements themselves.

06 May 2022 - 08:32- Fixed IncomeImportant- Source: Riksbank