Market Analysis: The Riksbank’s Hawkish Tendencies Intensify, and Two more Rate Hikes are Expected

Johan Lof, senior economist at Swedish commercial bank, said that the Riksbank raised the benchmark interest rate by 25 basis points to 3.75%, and raised the interest rate path by a further 30 basis points to a peak of 4.05%, significantly exceeding the forward guidance in April. Showed its hawkish side.

In addition, the Riksbank will accelerate the reduction of assets.
Despite the more restrictive policy, the Riksbank raised its GDP forecast, lowered its unemployment forecast and raised its CPIF forecast excluding energy.

“All in all, it shows that they are becoming more aware of deeper inflation problems.” Commerzbank expects two more 25 basis point rate hikes in September and November before starting to cautiously cut rates next summer.