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Sell-side views on Thedeen replacing Ingves as Governor

RIKSBANK



  • JP Morgan: "Our assumption is that Mr. Thedéen is dovish relative to Mr. Ingves. Since the Riksbank “lost the battle” about the mandate for financial stability and having the responsibility for macroprudential measures in 2013, the Riksbank’s reaction function has changed significantly to a more narrow focus on inflation. If the power of using macroprudential measures is transferred to the Riksbank, this would, all else equal, also imply less need to hike rates in the future. This in turn fits with our expectation that the Riksbank’s terminal rate is well-below market pricing."
  • Nordea: "During Ingves' era as governor, the Riksbank has had a very strong focus on inflation. This could, on the margin, change with Thedéen. In the short term, this could be slightly dovish as Thedéen may advocate somewhat slower tightening, taking the interest rate sensitive economy into account. In the long run, however, it could be somewhat hawkish, as Thedéen might be inclined to keep the base rate higher and do less QE."
  • Swedbank: "Regarding asset purchases, our call is that the Riksbank will reduce purchases in Q4 to SEK 9.25bn and probably continue to reduce purchases in Q1 2023. Thus, the appointment of Mr. Thedéen will probably not have any substantial effect on the Riksbank’s purchases plans next year... Mr. Thedéen is closely following the development for financial stability, thus he will bring those issues with him and that can be a factor that affects his monetary policy stance on the margin. Regarding the policy rate, we do not expect any differences between Mr. Ingves and Mr. Thedéen. We expect Mr. Thedéen to be as keen as Mr. Ingves to bring down inflation and meet the inflation target within a reasonable time frame."
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