Did the Riksbank abandon negative rates too soon?

Photo by David Lundberg
Sveriges Riksbank: ended almost five years of negative rates in December by hiking the key repo rate to 0%

In December 2019, Sveriges Riksbank put an end to almost five years of negative rates, hiking the key repo rate to 0%. But sharply lower inflation in January prompted policy-makers and analysts to ask whether the hike came too soon.

On February 19, Sweden’s statistical agency said the consumer price index with a fixed interest rate (CPIF) had declined in January to 1.2%, its lowest level in more than four years, down from 1.7% in December. The central bank’s target is 2%.

The main driver of

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