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[introduction] the swedish central bank cuts interest rates by 25 basis points and leaves the door open to a 50 basis point cut

china fund news reporter taylor

good evening, everyone. continue to pay attention to the news of overseas markets.

swedish central bank cuts interest rates by 25 basis points as expected

opens door to 50 basis point rate cut

on september 25, the swedish central bank lowered its benchmark interest rate by 25 basis points, in line with the expectations of economic experts. the swedish central bank lowered its policy rate from 3.50% to 3.25%.

the swedish central bank said it may take more drastic action in the coming months to boost the flagging economy.

the swedish central bank said on wednesday that "rate cuts are also possible at the two remaining monetary policy meetings this year," noting that "a 50 basis point cut is likely at one of these meetings." the central bank added: "the reduction in the policy rate is expected to be significantly faster than previously expected."

kyle chapman, a foreign exchange strategist at ballinger group, said, "sweden's inflation problem has been solved and even exceeded expectations." he predicted that the swedish central bank will need to take more aggressive measures. "i think there is a high probability that we will see two 50 basis point rate cuts before the end of the year."

with calls for rate cuts growing amid sluggish economic growth and rising unemployment, the riksbank said its new guidance should help address those challenges.

"these changes represent a relatively large shift in monetary policy towards a more expansionary direction, which will improve household finances and make it easier for businesses to invest," the central bank said.

ubs analysts said they now expect a 50 basis point rate cut in november and a 25 basis point cut in december.

torbjorn isaksson, chief economist at nordea bank, wrote that the riksbank's rate path suggests a 100% chance of a 25 basis point cut at each of the next three meetings, but the central bank has left the door open to a 50 basis point cut at one of the two remaining meetings in 2024. nordea bank expects the policy rate to be cut by 25 basis points at each of the next three meetings, taking the rate to 2.5% by january.

analysts at sweden's nordic bank expect the riksbank to cut interest rates by 50 basis points in november, 25 basis points in december, and two more cuts in the first quarter of 2025.

analysts said sweden had avoided the worst economic scenario, with previous market forecasts portraying it as the country in europe most affected by rising inflation and interest rates.

still, the nordic country’s economy has been largely stagnant for nearly three years, with output shrinking 0.3% in the second quarter, according to official data.

markets expect sweden’s economic recovery to accelerate by the end of this year and into 2025, thanks to tax cuts and spending increases as part of an expansionary budget proposal announced earlier this month.

"the rapid adjustment in the policy rate should help boost spending power among consumers and could speed up the pace of investment by businesses, shifting the swedish economy from very weak growth to a more favourable profile," said james pomeroy, global economist at hsbc.

us stocks

u.s. stocks were mixed tonight, with the dow jones industrial average falling 200 points and the nasdaq composite index rising slightly.

nvidia's market value returns to $3 trillion.

buffett's berkshire hathaway has once again sold a large amount of bank of america shares. since mid-july, its cumulative sales amount has been about us$9 billion, and its shareholding ratio has dropped to 10.5%.

the omaha-based group sold about 21 million bank of america shares between sept. 20 and sept. 24, cashing in about $863 million, according to its latest regulatory filings.

once its stake falls below 10%, berkshire will no longer be required to disclose any transactions within two business days.

buffett bought bank of america preferred shares and warrants for $5 billion after the financial crisis in 2011. in 2017, he converted those warrants, making berkshire the largest shareholder in bank of america. he then added another 300 million shares in 2018 and 2019.

regarding buffett's stock selling, bank of america ceo brian moynihan said he does not think the stock is overvalued and the market always likes to analyze buffett's every move.

“i think the market is second-guessing his actions,” moynihan said earlier this week. “he has his own investment strategy and his own thesis, and he’s sold a lot of different companies ... but at the same time, he’s buying companies, and that’s for the market to interpret. from our perspective, our stock is very much worth buying, and we’re buying it back every day.”

chinese stocks saw an adjustment, with the nasdaq golden dragon index falling 2%.