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Minutes: Key comments from Jansson

RIKSBANK
  • "While a somewhat more expansionary monetary policy would increase confidence in us actually managing to bring up inflation in the way intended, the inflation picture and inflation outlook have improved somewhat since our last monetary policy meeting and there are no signs of confidence in the inflation target starting to wane. In this situation, I nevertheless think it is best to leave policy unchanged so as not to waste the remaining ammunition unnecessarily. The scope we now have to make monetary policy more expansionary – regardless of whether this entails cutting the repo rate or undertaking other measures – is not unlimited after all."
  • "The key issue in monetary policy for me right now is not considering when support measures are to be withdrawn but rather what can be done if a situation arose where it became necessary to add further stimulus. My primary concern here is that more serious confidence problems regarding the inflation target may start to arise. And in this context I would like to repeat what I said at our monetary policy meeting in November: If a need to make monetary policy significantly more expansionary were to arise, then I do not think it will be sufficient just to implement asset purchases, but the repo rate will also have to be cut. However, I am not prepared to experiment with a so-called deeply negative repo rate, that is, cutting the rate to several per cent below zero.6 The latitude I envisage we have is close to the –0.5 per cent we have had before, possibly slightly lower, perhaps –0.75 or –1 per cent. For such negative rate levels, all our previously conducted analyses, which basically say that the various negative side-effects can be expected to be relatively minor, should apply"
  • Again he notes that inflation expectations data has been more positive recently.
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