Riksbank Bunge Maintains Cautious Tone

Deputy Governor Bunge's speech titled "Inflation is in the process of stabilising at the target, but the way forward is not entirely smooth" can be found here.

Key passages:

• ""Inflation is stabilising at the target and there may therefore be scope for a rate cut in May or June. But monetary policy must take a learning approach on what could be a crooked path towards a neutral interest rate level"
• "The March inflation outcome was clearly lower than expected and price growth rates declined broadly. It is very pleasing and good for the Swedish economy that the previously excessively high inflation has fallen back. But this must be weighted against the risks to inflation going forward"
• "“Geopolitical risks remain highly present. Although we have not recently seen any major supply disruptions, we are monitoring developments closely"..."In this environment, a small currency like the krona becomes particularly vulnerable and a weaker exchange rate is a clear upside risk for Swedish inflation.”