On April 7, 2026, Statistics Sweden released its Flash CPI for March 2026, where the CPIF (the Riksbank’s main measure) fell to 1.6 % – significantly lower than both forecasts and the Riksbank’s target of 2 %.

I wrote a post on April 10 where I sarcastically wondered how Governor Erik Thedéen would manage to justify maintaining or even raising the policy rate at the next monetary policy meeting, despite the Riksbank repeatedly undershooting its own inflation target.Today, April 22, we got the answer.

In a speech today at the Stockholm Chamber of Commerce, Erik Thedéen said (my translation):

”The risk of inflation being higher than what the Riksbank expected a few weeks ago has increased due to the Iran war.”

Important clarification: Thedéen did not say that the Riksbank plans to raise the interest rate. He pointed to increased upside risks to inflation and said the central bank has room to “wait and see” for now, but that they may need to act if the higher inflation risk materialises. In practice, this is a classic way for the Riksbank to argue for continued caution – i.e. not cutting rates despite clearly too low inflation.

I expect Thedéen and other Riksbank officials will repeat this message frequently in the coming weeks, right up until the next monetary policy decision (to be made on May 6 and announced on May 7 at 09:50).

On the same morning, May 7 at 08:00, SCB will release the Flash CPI for April.

Question to my readers: Will the Riksbank once again prioritise possible future inflation risks over the current weak demand and clearly undershooting inflation target?

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This is a new post on the new dewlar.me blog.
You can find the old blog here: https://mrsdewlar.blogspot.com

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