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SEB looks for 75bp in September with 25% prob of inter-meeting hike

RIKSBANK

SEB has revised its forecast for the Riksbank meeting in September and now sees a 75bp hike to 1.50% as its base case (it had previously looked for 50bp). It sees four reasons for the larger hike:

  1. Inflationary pressures : "Upward pressure shows few signs of easing."
  2. "Inflation expectations are moving upwards".
  3. Other central banks accelerating rate hikes to get policy rates back to neutral.
  4. Risks of further SEK weakness.
SEB notes that it now sees the probability of an inter-meeting hike before the scheduled September meeting as "around 25%". It notes that "Given that the Riksbank is likely to need a period of time for preparation and analysis, an inter-meeting rate decision based on a high August CPI could come around August 20."

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