The Riksbank's latest meeting minutes reveal a split among board members regarding the appropriate policy response to ongoing supply shocks. According to Danske Bank, Seim and Thedéen advocate for frontloaded rate hikes to address the disruptions, while Jansson, Bunge, and the newest member, Hjelm, favor a more gradual, wait-and-see approach. Hjelm specifically argues for looking through supply shocks, even in adverse scenarios, and, along with Jansson, cautions against overreacting and the risks associated with a sudden policy reversal [1].
Danske Bank concludes that the Riksbank remains highly prepared to take action in May should conflict-related disruptions continue to affect intermediate goods. This readiness is reflected in the money market, which has trimmed 5–6 basis points from the 2026 curve, indicating a slight adjustment in rate expectations [1].
The division within the board underscores uncertainty about the central bank's next steps, with some members prioritizing swift action and others urging caution. The market's reaction, as seen in the reduced basis points, suggests investors are factoring in the possibility of policy moves but remain cautious amid the board's lack of consensus [1].
CONCLUSION
The Riksbank board's split on supply shock response has led to moderate adjustments in money market expectations, with a slight reduction in the 2026 curve. While the central bank signals readiness to act if disruptions persist, the lack of consensus introduces uncertainty for investors and market participants.