After stable inflation figures and a strengthened krona recently, state-owned SBAB is sticking to its forecast of four interest rate cuts until the end of the year. They believe that the Swedish Central Bank should accelerate further after the likely cut next week.
"The stage is set for four more cuts in the policy rate during the autumn," says Robert Boije, chief economist at SBAB, in a press release.
There are, however, risks that could disrupt future cuts, not least the geopolitical situation in the world.
"Several factors suggest that the Swedish Central Bank should be able to cut the policy rate more this year than they have said so far," he comments further.
Based on the current state of the Swedish economy, SBAB believes that a double cut in the policy rate (0.5 percentage points) next week could be justified. However, it is not particularly likely.
"We do not think that the Swedish Central Bank wants to jeopardize the recently strengthened krona. If the ECB cuts its policy rate on September 12 and the Fed more clearly announces a cut in the near future, the Swedish Central Bank can safely follow up the August cut with a new cut of 25 points in September and two more before the end of the year," says Robert Boije.
