More central bank policy announcements
This week’s single most-watched macroeconomic statistic is scheduled for publication tonight (Wednesday, March 16) Swedish time, when the Federal Reserve makes its monetary policy announcement. We expect the US central bank to raise its key interest rate, now 0-0.25%, by 25 basis points. Given a consumer inflation rate of nearly 8% in February, the Fed has no other choice than to begin its rate-hiking cycle and to signal additional hikes at coming policy meetings.
The Bank of England will make its policy announcement tomorrow (Thursday, March 17). We expect a rate hike there too and an announcement that the British central bank will let its balance sheet shrink by ceasing to reinvest the proceeds of maturing bonds.
The Nordic countries
Surprisingly high Swedish inflation figure
The Swedish inflation figure published on March 14 was surprisingly high. Year-on-year CPIF inflation (the consumer price index less interest rate changes) rose to 4.5% in February, exceeding the market consensus forecast of 4.1%.
Our Market View
"Our Market View" is not included in this week's Market Outlook but is being replaced by a scenario analysis, which we will publish later this week.