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11 Dec 2014
Riksbank might push rate profile lower to signal commitment to inflation target – TDS
FXStreet (Barcelona) - Jacqui Douglas, Senior Global Strategist at TD Securities, notes that the RIksbank will have to nudge the rate profile lower to combat inflation risks due to lower oil prices.
Key Quotes
“The Riksbank will have to push its inflation forecasts lower again, given the fall in crude oil prices. However, inflation should still remain positive through 2015.”
“Inflation expectations have nudged a little lower again, which will influence a central bank that is still worried about the credibility of its inflation target.”
“We look for the repo rate profile to be pushed into modestly negative territory, probably just 3-7bps below zero, to signal that negative rates are a possibility if necessitated by falling inflation expectations. We like buying EURSEK in response”
Key Quotes
“The Riksbank will have to push its inflation forecasts lower again, given the fall in crude oil prices. However, inflation should still remain positive through 2015.”
“Inflation expectations have nudged a little lower again, which will influence a central bank that is still worried about the credibility of its inflation target.”
“We look for the repo rate profile to be pushed into modestly negative territory, probably just 3-7bps below zero, to signal that negative rates are a possibility if necessitated by falling inflation expectations. We like buying EURSEK in response”