STOCKHOLM - A recent trader survey by SEB AB reveals that a majority of financial professionals anticipate the Riksbank, Sweden's central bank, to increase its key interest rate by 0.25% to 4.25% tomorrow. This expectation comes despite some voices in the market suggesting that the rates should be held steady.
The survey, which reflects the views of traders earlier this week, indicates that out of 21 institutions, 13 forecast a rate hike while eight predict no change. The potential increase is widely seen as the final rise in the current cycle, with expectations set for two rate reductions by December next year. Moreover, about one-fifth of the survey participants foresee an expansion of the bond-sales program that commenced in February.
This consensus for a rate hike among financial institutions aligns with broader financial forecasts and indicates a cautious approach towards tightening monetary policy as the cycle nears its expected end. The Riksbank's decision is keenly awaited by markets, as it will signal the central bank's stance on inflation control and economic growth prospects going forward.
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