MNI Riksbank Preview: June 2024 - Guidance For Two More Cuts Still In Tact

EXECUTIVE SUMMARY

• The Riksbank is widely expected to keep its policy rate on hold at 3.75%. After cutting rates by 25bps in May, the March MPR rate path assigned a very small probability of a consecutive move in June. Executive Board communication since then has also stressed that such a move is very unlikely.
• Focus will therefore lie in the updated policy path in the June MPR. We think the rate path will be broadly unchanged across the forecast horizon, and therefore will still be consistent with Riksbank guidance for two more rate cuts in H2 2024 (and its cautious and gradual approach to easing policy).
• Analysts are unanimous in expecting rates to remain unchanged in June, with the policy path overall seeing limited revisions. Looking ahead, analysts are split between the next 25bp rate cut in August or September.
• The May decision showed that the Riksbank is happy to make active policy decisions at non-MPR meetings, keeping an August cut firmly on the table should macroeconomic data evolve in line with the updated forecasts in the June MPR.

For our full preview, including a summary of 15 sell-side views, see here:

MNI Riksbank Preview - 2024-06.pdf