MNI BRiEF: Riksbank Puts Neutral Rate In 1.5 To 3.0% Range

MNI (LONDON) - The Riksbank has unveiled its updated estimate of the long-term neutral rate ahead of the December policy decision and forecast round, with Deputy Governor Anna Seim saying that it was in a 1.5 to 3 per cent range, a full percentage point below the last full esimate of 2.5 to 4% published back in 2017.

The change, however, appears to be of limited practical significance. The central bank had more recently said that the neutral rate had fallen and was most likely in the lower half of its 2017 range and its latest forecasts in the September Monetary Policy Report showed the policy rate troughing at 2.25% , the mid-point of the new range. 

Governor Erik Thedeen has downplayed the importance of the neutral rate for policy setting (see MNI INTERVIEW: Inflation Confidence Key To Fast Cuts -Thedeen )

Seim warned of fresh risks arising from US policymaking with the outcome of the US election "likely to lead to the implementation of various trade barriers, which could create some inflationary pressures due to supply constraints."