Inflation in Sweden has exceeded expectations, prompting a change in interest rate cut predictions. Two weeks ago, the probability of a cut in August was estimated at 36 percent, which has now decreased to 20 percent following the release of June's CPIF inflation figure, which rose to 2.9 percent. This figure was higher than both the previous month and economists' expectations. The fixed-income market now anticipates that the next potential rate cut will instead occur in autumn, possibly as late as December, while further cuts seem unlikely thereafter.
The chances of a cut to the interest rate in August have dropped from 36 percent to 20 percent due to higher-than-expected inflation figures.
June CPIF inflation rose to 2.9 percent, surpassing both May's 2.3 percent and economists' predictions of 2.5 percent, putting pressure on monetary policy.
The fixed-income market now predicts the next rate cut to be in autumn, potentially as late as December, after initially expecting it in August.
The Riksbank's target inflation rate is 2 percent, significantly lower than June's reported inflation, indicating potential challenges for future monetary policy.
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