Will the Riksbank hold Sweden's policy rate on September 24?

Sweden's central bank governors have been clear about one thing: their next rate move will be up. Unfortunately, they never specified when that’s going to happen. The Riksbank held at 1.75% in August and kept that stance through a string of weak inflation and employment prints. Now, with the September 24 meeting approaching, prediction markets are pricing a near-certain hold. Kalshi's contract on the decision puts "Maintain current rate" at 96 cents.

The board's own words from the August minutes show why Thursday is too early:

• Governor Erik Thedéen said the next move must be a raise but would not commit to a date: "the timing of this is still uncertain."
• Deputy Governor Anna Seim pointed only to autumn in general.
• First Deputy Governor Aino Bunge, who had previously sketched a rate path with about 50% odds of an autumn hike, said plainly: "We are not there yet."
• All five members voted to hold.

With two more meetings in the season, November 4 and December 16, the board has room to wait, and ING now places the hike at one of those later dates.

Recent data also offer little justification for an immediate policy tightening. Statistics Sweden reported on September 14 that CPIF inflation held at 0.7% in August, while the core measure excluding energy fell to 0.5% from 0.6%. Unemployment came in at 8.5% two days later, or 8.7% on a seasonally adjusted basis. Basically, prices are not accelerating and the labor market remains soft, so the board has no reason to rush a hike that would slow the economy further.

The Riksbank will raise rates eventually, just not this week. The August numbers did nothing to speed that up, so we agree with the market's 96 cents on a hold.