Dovish Leanings From Breman and Thedeen In June Minutes

A first glance at the Riksbank minutes shows First Dep Gov. Breman most explicitly expressing a preference for an August rate cut (consistent with the revised rate path in the June MPR). However, Governor Thedeen also notes that three cuts are “somewhat more probable” than two in H2 2024 – clearly a dovish lean. Seim, Bunge and Jansson offer a slightly more cautious tone. Some key quotes:

• Thedeen: “The somewhat weaker development in the labour market is one reason why I believe that we should proceed somewhat faster with the rate cuts”…“My assessment is that it is somewhat more probable that we will cut the policy rate three times, than twice, during the second half of the year”.
• Breman: “If (Note: italicised in the minutes) we see a clear downturn in the CPIF excluding energy in the coming months, at the same time as the long-term inflation outlook remains favourable, the probability of three cuts rather than two in the second half of the year will increase, with the next cut probably being in August”.
• Seim (whose first Monetary policy meeting was in June): “My assessment is that, by cutting the interest rate during the second half of the year, we will be able to attain similar macroeconomic outcomes as if we were to cut the rate today, but in a controlled manner that will also give us access to further data before acting”.
• Bunge: “Monetary policy needs to be characterised going forward by a trial and error approach on the way towards a neutral interest rate level, where we are prepared to adjust our plan if necessary”.
• Jansson: “If pricing behaviour continues to be too aggressive going forward, I stand ready to support further revisions to our interest rate plan in a tighter direction, including substantial revisions if necessary. Of course, I am also ready to support a more expansionary plan if needed”.