Following Swiss leadership

Daily update

Sweden’s Riksbank followed the Swiss National Bank’s leadership with an interest rate cut. The move was generally though not universally expected by financial markets. The press conference implied that lower inflation was driving interest rates lower, and that more rate cuts may be forthcoming later this year.
Sweden’s inflation is still above the level most central banks would consider a target, but the recent direction of inflation has been clear. Central bank policy influences inflation in the future, not in the past. This is one of the problems with Federal Reserve Chair Powell’s backwards “data dependency” idea.
The Bank of England offers its policy decision today. A total of 43 out of 43 surveyed economists are expecting no change in rates, and how could that many economists ever possibly be wrong? Except 52 out of 57 economists thought that the BoE would raise interest rates in October 2023, and it did nothing. Dissent and intellectual disagreement are refreshing features of the BoE’s policy deliberations, which adds a certain maverick potential to the details of the decision.
With much of Europe out being European, the data calendar is quiet. The US initial jobless claims release is probably the main focus for investors.