The case for 'leaning against the wind' received another blow today (October 13), as Sveriges Riksbank deputy governor Martin Flodén added to the mounting scepticism towards using interest rates to address financial stability risks.
Sweden's policy rate would need to be "considerably higher" than it is now to tackle the problems of rising debt and house prices in the country, Flodén argued, which would mean "a greater risk that inflation will remain below the target".
His comments echoed those of
- James Bullard on 2% rates, tariffs and Fed leadership
- Podcast: David Hendry and John Muellbauer on empirical macro
- Argentinian central bank takes drastic action over currency crisis
- Turkish central bank raises overnight rates in bid to stop lira’s fall
- Policies must change to stop emerging markets crisis, analysts say