The Riksbank cut its policy rate by 50bp today to 2.75%, but the accompanying policy statement suggested that it plans only two more 25bps rate cuts to take it to a “terminal” rate of 2.25%. Given today’s bumper rate cut, we have lowered our terminal rate forecast by 25bp which brings it in line with the Riksbank’s forecast of 2.25%, and expect it to reach that level in January.
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