Riksbank’s Jansson: Still some way to go before I would be worried about inflation

Commenting on the recent concerns over rising inflation, Riksbank’s Deputy Governor Per Jansson said that there is “still some way to go before I would be worried about inflation situation on the upside. “

Additional comments

Inflation ex-energy is now closer to target, which is good news.

Inflation expectation picture continues to look solid.

Inflation picture looks pretty good, perhaps improving a little bit.

Assumptions we made in April look intact.

I would see the upside risks as big as downside risks for inflation.

Still see inflation at 3% for a year or so before policy action needed.

We should be careful not to react too quickly if inflation goes above target, probably a good thing.

Underlying pressure on inflation not super strong.

If rates start to increase more significantly, that would have to be monitored to see effects on housing market.

Exchange rate matters a lot for us.

I would prefer the exchange rate not to go below 10 to the euro.

Still believe there is some slack in the economy.

Difficult to see that supply chain effects could permanently affect inflation rate.

Inflation expectations above 2% would be a good thing, quite some time before I would be worried about them being higher.

I prefer keeping policy expansionary too long to exiting too early.

Very bad for Sweden to be a front-runner in monetary policy.

Openminded about sequencing in terms of balance sheet and rate policy when normalizing policy.

Market reaction

The Swedish krona (SEK) advanced further to daily highs of 10.1282 against the euro on Jansson’s remarks.  

At the time of writing, EUR/SEK drops 0.10% on a daily basis to trade at 10.1371.