In Sweden the Riksbanken rate is 1,75 %. Inflation is 11 %.
How do you like that 9 % spread?
Given that, it seems obvious what will have to happen to rates, IMO: we will have to follow the FED's example. If we don't, we'll have still more massive inflation, perhaps hyper. Truly stuck between a rock and a hard place.
But Swedish stock market is somehow down just about -15 % from the top. (I.e. nothing, yet. However currency is down a lot relative everything else, especially dollar – so stocks are down significantly in that relative sense.)
I expect mayhem in the months/year(s) to come.
So does every consumer out there already, however, as consumer confidence indexes are below even GFC levels (!!). That is of course usually a contrary indicator. However, this time, it seems that the market is missing something. Or is it the other way around...? Perhaps inflation is discounting itself, so to speak, so that the market doesn't have to come down nominally?
Interesting times ahead; scary, and exciting. |
