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JP Morgan see "lose to no chance of an April hike"

  • "Our new Riksbank forecast sees rate hikes of 25bps in September this year as well as in February, June, and November next year. This is one more rate hike relative to our old forecast."
  • "There is close to no chance of an April hike. To put it simply, a governor who is that vague in his remarks does not fit with a rate hike coming up in just a few weeks’ time. Also, raising rates when consumer confidence is signaling a deep recession (not our forecast) – as households are faced with a war close to their borders and a cost of living squeeze – is unlikely to be a popular decision. This favors patience (and yes, the Riksbank should theoretically just focus on inflation and leave the rest to fiscal policy, but central banks were also theoretically not supposed to react to supply shocks!)."
  • "In terms of a June hike, we think that is a much more realistic outcome. The hawkish members are concerned with waiting too long and our models suggest that Prospera inflation expectations could hit 2.5% in June – a threshold, which Skingsley has highlighted would give reason to “reevaluate current monetary policy plans”

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