The Swedish central bank is expected to cut interest rates to 3.75% and further to 2.25% by 2025.

According to Jinshi, Swedish commercial bank Handelsbanken predicts that the Swedish central bank will cut its policy rate by 25 basis points to 3.75% on Wednesday and will take cautious policy normalization measures thereafter. Johan Lof, head of forecasting at Handelsbanken, said that the overall inflation rate in March was much lower than the expectations of the Swedish central bank and market consensus, which provided favorable conditions for a rate cut in May rather than June.

However, a rate cut in May is not certain, as the recent weakness of the Swedish krona may hinder the actions of the Swedish central bank. They expect two more rate cuts in September and December in 2024 (after May), and then four more rate cuts by September 2025, bringing the interest rate to 2.25%.