Strong reasons to expect Swedish inflation will ease, Riksbank's Jansson says
LONDON, April 1 (Reuters) - There are strong reasons to believe Swedish inflation, which has run above target in recent months, will fall back and the Riksbank should not stoke expectations of rate hikes unduly, Central Bank Deputy Governor Per Jansson said on Tuesday.
"I believe it is particularly important not to create unnecessary expectations that interest rate increases are imminent, not least because the Swedish economy still needs support," he said in a summary of remarks made at an event in London, published by the Riksbank.
The Riksbank held its key interest rate at 2.25% at its latest meeting, on March 20, and forecast unchanged rates for the foreseeable future though uncertainty, not least linked to U.S. policy moves and global trade, is unusually great.
Further clouding the outlook, inflation has run higher than expected and above the Riksbank's 2% target so far this year.
"It is only if confidence in the inflation target starts to be threatened that I think such expectations (of rate hikes) are justified," Jansson said in the statement.
"But if such a situation were to arise, which, as I have said, I do not consider likely at present, we should act quickly and decisively in monetary policy."
Jansson's Riksbank colleague Anna Breman said last week that while steep tariffs being championed by U.S. President Donald Trump could dent growth in Sweden, the impact was less clear-cut for inflation.
Trump is set to announce a comprehensive tariff proposal on what he's called "Liberation Day" on Wednesday, after implementing levies on aluminium, steel, and automobiles, along with increased tariffs on all goods from China.
Jansson said there were still reasons for optimism on growth in light of recent rate cuts and sharply rising spending on the output of Sweden's large defence industry, but acknowledged much was "dependent on what comes from abroad", not least tariffs.
"Maybe I'll regret this in two days," he said during his presentation.
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