Market News

• Riksbank seen cutting policy rate to 3.25% from 3.50>#/li###
• Policy rate expected to be 2.75% at year end
• Rate announcement 0730 GMT, Sept. 25
• Link to data:

STOCKHOLM, Sept 23 (Reuters) - Sweden's central bank is expected to cut its policy rate by a quarter percentage point to 3.25% on Wednesday and then twice more before the end of the year as inflation pressures continue to ease, a poll of analysts by Reuters showed on Monday.
All 20 analysts in the poll saw a 25 basis point cut this week, with the policy rate expected to end the year at 2.75% before falling to 2.00% in 2025.
"Rate cuts are definitely in the pipeline. Inflation is low, the Swedish economy is still stagnant and unemployment has risen," Nordea said in a note. "We expect 25 basis points but see an increased likelihood of larger cuts later this year," it said.

The central bank has cut rates twice this year, in May and August, the first easing in eight years. It said in August that it could make up to three more cuts before the end of the year as price pressures eased.
Riksbank Governor Erik Thedeen said in the minutes of the August meeting that he thought three cuts were more likely than two and the minutes also indicated that a cut of half a percentage point was not off the table.

Headline inflation has continued to ease from a peak of above 10% in 2022, coming in at 1.2% in September - below both the Riksbank's forecast and its 2% target.
The economy has slowed with manufacturers, households and the construction sector all weakening in the second quarter.
With the U.S. Federal Reserve cutting rates by half a percentage point last week, worries have eased that rapid Swedish rate cuts could hurt the crown and push inflation back up.

After this week, the Swedish central bank makes two more rate decisions this year, in November and December.
The Riksbank publishes its policy decision at 0730 GMT.