Sveriges Riksbank left its policy rate unchanged at 1.75% on Wednesday and nudged its forecast path higher, signalling that the probability of a rate rise later in 2026 had risen. The decision, taken at the Executive Board's meeting on 16 June and announced on 17 June, keeps the rate in force from 24 June.

In its monetary policy report, the Riksbank lifted the projected policy rate for the fourth quarter of 2026 to 1.82%, from 1.77% in the March round. The revision is modest in numerical terms but marks a clear shift in the balance of risks, with the Executive Board saying the likelihood of a further tightening step this year had increased.

PATH REVISED UP, NOT DOWN

The upward revision reverses the direction of travel implied earlier in the spring. In March, the central bank's projected end-2026 rate had pointed to a broadly flat trajectory. By June, the Executive Board judged that domestic price and wage dynamics warranted a marginally tighter path, even without moving the rate at this meeting.

By holding at 1.75%, the Riksbank has kept its policy stance stable while using the rate path and accompanying commentary to prepare markets for the possibility of tightening. The board framed the decision as consistent with returning inflation sustainably to target while giving the real economy time to adjust to earlier policy moves.

Sweden's krona and short-dated government bond yields are the most direct financial channels for the message. The Riksbank has repeatedly emphasised that changes to the rate path, even without an accompanying rate move, are a genuine policy signal and should be read alongside the decision itself.

GUIDANCE POINTS TO LATER IN 2026

The guidance was explicit that the higher probability of a hike relates to later in 2026, rather than the immediate summer meeting. That leaves the board room to assess incoming data on inflation, wages and activity before deciding whether to act on the tilt in the rate path.

The Riksbank said it would continue to weigh both external conditions and domestic demand as it calibrates policy. For now, the message from Stockholm is that the easing cycle is firmly on hold and the bar for another cut has risen, with the next move more likely to be up than down if conditions evolve as forecast.

The June monetary policy report and press release are published on the Riksbank's website, alongside the updated rate path and macroeconomic projections. The Executive Board's next monetary policy meeting will provide the first opportunity to test whether the higher-for-longer signal translates into action.

The 1.75% level at which the rate is held from 24 June sits well below the peaks reached during the earlier tightening cycle, but the direction of new signalling from the June meeting is unambiguously hawkish. The five basis point upward revision to the Q4 2026 forecast, from 1.77% to 1.82%, is small in isolation but points to a Riksbank that no longer sees further cuts as the more likely next step. The updated projection is designed to be read alongside the Executive Board's explicit statement that the probability of a hike later in 2026 has increased.