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RIKSBANK: Minutes Support The Sep Rate Path Revision, But Not Much More (2/2)

RIKSBANK

The minutes do not exclude a 50bp move (in line with the policy statement guidance). The Executive Board are clearly concerned by developments in the real economy (in particular household consumption) and appear willing to act if deemed necessary.

  • Governor Thedeen noted that 50bp cuts would be consistent with a gradual approach to policy. Similar remarks were made to the MNI Policy Team last week (see here).
  • Incoming domestic data will remain key, beginning with September flash inflation and August activity data next week.
  • An October ECB cut (now the base case amongst analysts and markets) probably increases the likelihood of a larger Riksbank cut in November all else equal, but we don’t think its enough to tempt at least three of the Executive Board into supporting such a move on its own.
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The minutes do not exclude a 50bp move (in line with the policy statement guidance). The Executive Board are clearly concerned by developments in the real economy (in particular household consumption) and appear willing to act if deemed necessary.

  • Governor Thedeen noted that 50bp cuts would be consistent with a gradual approach to policy. Similar remarks were made to the MNI Policy Team last week (see here).
  • Incoming domestic data will remain key, beginning with September flash inflation and August activity data next week.
  • An October ECB cut (now the base case amongst analysts and markets) probably increases the likelihood of a larger Riksbank cut in November all else equal, but we don’t think its enough to tempt at least three of the Executive Board into supporting such a move on its own.