Swedish Central Bank Lowers Interest Rate to -0.5 Percent
The Swedish central bank, Riksbank, lowered the interest rate to -0.5% at 09:30 this morning (local time). Stefan Ingves, governor of the Swedish central bank, presented his new record-low interest rate from the Governor House in Stockholm. The interest rate was lowered to -0.5 percent from the previous -0.35 percent.
Usually when central banks lower interest rates, the market rebounds, but the Swedish stock market index, OMX30, dropped another 1% immediately after the announcement, landing around -3.0%, where it’s hovering now. With the OMX30 at -13% for the year, and a looming housing bubble about to pop, it appears that the Swedish central bank is out of ammo.
Compare the current housing bubble in Sweden to the 1990s bubble. Then consider that the world’s second-highest taxed population with a government that is hostile towards business is undergoing a stock market crash and a refugee crisis, and you have a recipe for pain and disaster.