The Riksbank minutes suggest that the doves are now taking a more neutral stance.
Stable inflation expectations at 2% play a crucial role. Headline inflation at target for almost couple of years is important too.
This allows the board members to be somewhat less data dependent and more forward looking.
Three board members can in fact vote for a hike already in October, but will be outvoted by the other three (including Stefan Ingves).
Revised GDP data means that the Riksbank will have to scale back growth forecasts. In addition, we believe CPIF excluding energy (September-November) will remain 0.2-0-3pp below the Rikbank's forecast.
Despite our belief that inflation expectations will remain underpinned by high energy prices, we consider a December hike as more than a 50% probability. A reasonable compromise would be announce a slower pace of rate hikes going forward.
To read the entire report Please click on the pdf File Below: