Riksbank Preview: Forecasts from five major banks, another big rate hike

The Riksbank is set to announce its Interest Rate Decision on Thursday, November 24 at 08:30 GMT and as we get closer to the release time, here are the expectations forecast by the economists and researchers of five major banks for the upcoming central bank's meeting. 

Riksbank meets is expected to hike rates by 75 basis points to 2.50%. At the last meeting, the bank delivered a hawkish surprise and hiked rates 100 bps to 1.75%.  

ING

“Given that the ECB has continued with its 75 bps rate hikes – and the Riksbank has been vocal about staying out in front of the eurozone’s interest rate policy – we expect further aggressive tightening by Swedish policymakers. Remember this is Riksbank’s last meeting before February, and we, therefore, expect a 75 bps hike on Thursday. We’d expect the new interest rate projection published alongside the decision to pencil in at least another 25 bps worth of tightening early next year, but ultimately there are limits to how far it can go given the fragile housing market.”

Danske Bank

“We expect Riksbank to hike its policy rate by 75 bps, which is largely priced in the markets already.”

TDS

“We now look for the Riksbank to deliver a 75 bps hike despite signaling for a 50 bps increase in Sep, as core CPIF has surged and major CBs have hiked more than the Bank expected. While markets see ~50% odds of a 100 bps hike, we think a 50 bps move is more likely, as headline CPIF is much lower than the Bank's forecast.”

Swedbank

“We expect the Riksbank to raise by 75 bps to 2.5%. We also expect its new rate path to show another hike of 25 bps in the first half of 2023. But in reality, we think it will raise more than that – namely, 50 basis points – at the February meeting to a level of 3%. The decision to stop reinvesting securities at the start of next year isn’t likely to change. In other words, monetary policy is getting tighter.”

Nordea

“We expect the Riksbank to increase the policy rate by 75 bps to 2.50%, but our conviction is low. October core CPI, large rate hikes by ECB and Fed, few Riksbank meetings and higher foreign inflation would be the main drivers for a 75 bps hike. A 50 bps hike is the Riksbank’s guidance from September and an obviously possible outcome. The bond purchase amounts should in our view be phased out completely in Q1 2023. The Riksbank could decide to continue purchases in smaller amounts in order to ‘keep readiness’ for future interventions.”