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Minutes: Hawk / Dove Merry-go-round

RIKSBANK
  • There was a fascinating shift the Riksbank Minutes, published this morning.
  • Floden and Breman, who had both been viewed as hawks going into the decision and had both dissented in favour of faster tapering of reinvestments in February, both noted that they could have voted for a flatter repo rate path. Breman said that she very rarely would want to dissent on the repo rate path but that she seriously considered it while Floden said that he thought the published repo rate path would lead to a faster slowdown in growth than the Riksbank's GDP forecasts suggested (and that he sees a greater probability of two rather than three hikes this year).
  • Skingsley also surprised by noting that the pace of interest rate hikes is rather cautious - moving from being one of the most dovish to probably the most hawkish member.
  • Most of the other Executive Board members seemed happy to stick to the script of the MPR. However we did get the feeling that if we saw either upside surprises to inflation or downside risks to growth we could start to get some formal dissents at futures meetings. The direction of those dissents seems likely to be data-dependent.

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