Sweden's Interest Rate Shocker

[RobertB]

Sweden's Interest Rate Shocker
Lionel Laurent, 02.13.08, 12:15 PM ET

Sweden's central bankers know how to shock the market at a time of financial turmoil. On Wednesday, they raised the key interest rate by 25 basis points, to 4.25%, defying the widely-held belief that rates would be kept on hold at 4%.

" Inflation has risen rapidly in Sweden in 2007, and will remain high over the coming year," said the Swedish central bank, known as the Riksbank. "The inflation rate has been pushed up by higher energy and food prices, but there are also high cost pressures in the background."

http://www.forbes.com/home/markets/2008/02/13/sweden-interest-rates-markets-equity-cx_ll_0213markets13.html

[funmudder]

:tsk

[seekingtruth1]

yeah its bad for stocks short term but realitically we have the same dilmma here...all this slashing of rates just debases our currency and contrary to what the govt tells us IMO we have inflation and its gonna get worse....food esp....

If we had sound money currency and not fiat...we could let the mrkt determine where rates go...that is the best scenario but nooooo we'd rather private unkown families collect interest debt via taxes on every dollar we print.....what a brillinat scheme that was....for a few anyway...just not the world....

So artifical intervention it is!!!!!! Maybe we wont have to worry about economics much more.....

[Christopher Clemons]

That story on Sweden is interesting as you'd generally think that their central bank is in line with the Euro Central Bank, but check this out:

http://images.google.com/imgres?imgurl=http://www.washingtonpost.com/wp-srv/inatl/images/maps/euro_map.gif&imgrefurl=http://www.washingtonpost.com/wp-srv/inatl/longterm/euro/euromap.htm&h=340&w=360&sz=16&tbnid=_h5j-fBpfVoR1M:&tbnh=114&tbnw=121&prev=/images%3Fq%3Deuro%2Bmap%26um%3D1&start=3&sa=X&oi=images&ct=image&cd=3

They are not a member of the ERM, and as such they can act independently of
the rest of Europe. Clearly, they are at least trying to protect what they
have control over.