MNI BRIEF: Riksbank Minutes Suggest May Have Cut Enough
MNI (LONDON) - The Riksbank Executive Board's January minutes suggest that the 25 basis point cut, taking the rate down to 2.25%, could be the last in the cycle although uncertainty is high and there were differences of emphasis among the five members. (see MNI BRIEF: Riksbank Cuts 25bps; No Dissents Recorded )
Having cut by a total of 175 basis points in nine months Governor Erik Thedeen said "the policy rate has probably been lowered sufficiently." (see MNI INTERVIEW: Riksbank Head Sees Turbo-Charged Policy Biting )
First Deputy Governor Anna Breman, however, noted that the downside risk to activity remained and she said "the probability of the next step being a further rate cut is greater than the next step being a rate hike." Deputy Governor Anna Seim described policy as "virtually neutral," stating it would "eventually close the inflation and GDP gaps." The minutes overall suggest that it will take downside news on activity and no upside inflation surprises to get a cut through in coming months, with the Governor pre-disposed to halting the easing.