Riksbank's Jelm: A rate hike within 2026 is reasonable

The latest monetary policy meeting minutes show that Riksbank Deputy Governor Goran Jarm said that "if the economic outlook in the draft report remains unchanged," raising the policy rate to 2% in 2026 is "reasonable." He also mentioned that the policy rate will most likely need to be raised again in the first half of 2027, a judgment that "looks reasonable." Jarm said that in the past few months there have been "clear signals that the foundation for the economic recovery is more solid," with the utilization of production and labor resources returning to normal levels faster than expected. "Therefore, it is logical to advance the normalization of the policy rate." He concluded: "Overall, combined with the economic trajectory in the current forecast, I believe the policy rate path is set slightly too high."