Danske Bank analysts note the Riksbank unanimously kept rates unchanged, but minutes show Jansson considered a cut and may reserve his vote in March. Flash CPIF core inflation fell to 1.7% year-on-year, well below expectations, adding downward pressure on front-end rates. Still, stronger economic conditions mean the hurdle for a rate cut remains high in the near term.

Dovish data versus cautious board

"The decision to keep the policy rate unchanged was unanimous, as revealed in the Riksbank’s minutes."

"Jansson considered both a reservation and a rate cut during this meeting and signalled openness to a reservation at the upcoming meeting in March."

"In contrast, Thedéen emphasised that the Riksbank should look beyond the short-term effects on inflation, stating that both inflation and macroeconomic conditions would need to undershoot expectations for a rate cut to be considered."

"Flash inflation was lower than expected: CPI at 0.4% y/y, CPIF at 2.0% and CPIF excluding energy (core) at 1.7%."

"The low flash estimates will add to downward pressure at the front following Jansson's comments in the minutes."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)