The Propsera’s monthly survey showed that long term inflation expectations in Sweden continued to be slightly below 2 percent target. The Prospera’s monthly survey, which includes only money market players, indicated that inflation expectations continues to be lower than 2 percent on all forecast horizons, noted Nordea Bank.
When compared with October, expectations remained the same in November. The average inflation expectations on a five-year horizon dropped slightly to 1.91 percent from 1.92 percent; however, this is expected to be overlooked by the Riksbank, according to Nordea Bank. The median inflation expectations remained at 2 percent for the third straight month.
Today’s survey, in all implies that inflation projections are not trending upwards anymore, noted Nordea Bank. Therefore, both inflation and inflation expectations continue to be lower than the target and are currently trending in the wrong direction. This would definitely be a challenge for the Riksbank and they course of action for December depends greatly on the next inflation outcome, stated Nordea Bank.
