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Goldman Sachs revised its outlook on the monetary policy of Sweden’s central bank, the Riksbank, following a significant increase in core inflation. Core inflation in Sweden rose by 0.7 percentage points to 2.74% year-on-year in January, surpassing both consensus expectations and the Riksbank’s projections from December.
This development comes in the wake of the publication of the January meeting minutes earlier this week, which highlighted a more hawkish stance from the central bank and emphasized a continued focus on data to guide future decisions.
The latest inflation data suggests a stronger persistence of inflationary pressures than previously anticipated. Goldman Sachs analysts noted that the forecast for the policy rate made in December essentially remains valid, despite the unexpected rise in inflation. As a result, Goldman Sachs now predicts that the Riksbank will maintain its current policy rate in its upcoming March meeting.
Looking ahead, Goldman Sachs anticipates potential policy adjustments later in the year. The firm expects that, contingent on the impact of trade policy uncertainty becoming more evident in the months to come, the Riksbank may implement easing measures during the June and September meetings.
This would lead to a terminal rate of 1.75%, aligning with previous expectations.
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