Swedish central bank seen holding line against global easing momentum

Bloomberg

Riksbank Governor Stefan Ingves, who has likened the world’s major central banks to elephants, is likely to ignore the growing momentum for easing emanating from Frankfurt and Washington, for now.
Ingves and his colleagues in Stockholm are seen keeping their benchmark rate unchanged at minus 0.25 percent as they meet this week.
It’s a close call whether they will maintain their forecast for a rate increase toward the end of the year.
They are facing growing pressure to ease monetary policy as growth cools and the European Central Bank and the US Federal Reserve move toward adding stimulus. But Swedish inflation has been in line with the bank’s forecast over the past two months, and the krona remains weak, giving policy makers leeway to avoid making any major adjustments to the forward guidance.
“When major central banks move in the opposite direction, that of course puts pressure on the Riksbank,” said Michael Grahn, chief economist at Danske Bank. “We’re guessing that they may delay the rate hike by a quarter, or use very soft language. We don’t think they’ll flag for a potential rate cut.”
Riksbank board members have so far been reluctant to comment on whether the discussions of renewed easing from the Fed or ECB might derail their plans to raise rates.
But Deputy Governor Per Jansson, the most dovish of the bank’s six rate setters, saying there was as of yet “no need to panic in Sweden” with price growth and inflation expectations so far on target and a strong labour market.