Swedish banks predict Riksbank rate hikes as US Fed signals further tightening

Major Swedish financial institutions have adjusted their monetary policy forecasts upward, anticipating earlier interest rate increases by the Riksbank. Commercial bank Nordea now projects two rate hikes bringing Sweden's benchmark rate to 2.25 percent, where it expects policy to hold through December 2028. Nordea pointed to accelerating Swedish economic growth and international rate hikes as key factors. Separately, state-owned lender SBAB announced expectations of three consecutive rate increases, pushing the policy rate from 1.75 percent to 2.50 percent by February to manage rising inflation.

Meanwhile, Federal Reserve Bank of Dallas President Lorie Logan indicated that the United States central bank needs to increase short-term interest rates by a minimum of 50 basis points to render policy "slightly restrictive" and guide inflation back toward its 2 percent target.

Sources: Dagens Industri, Svenska Dagbladet, Sydsvenskan.