Fed, ECB plans could pose risk to Swedish May rate cut, Riksbank's Jansson says

"The important thing, however, is that the development of inflation does not deteriorate," Jansson said in the summary of a speech published on the central bank's website. "And if that does not happen, as I see it, the threat to being able cutting the interest rate in May will instead come mainly from the postponement of the rate-cutting plans of other central banks," he added.

If the development of inflation in Sweden does not deteriorate, the main threat to cutting interest rates in May will come from the postponement of rate-cutting plans of other central banks, Riksbank Deputy Governor Per Jansson said on Thursday.

At its most recent meeting, the Riksbank kept its key interest rate unchanged at 4.00% but said there was a strong chance it could start cutting rates in May. "The important thing, however, is that the development of inflation does not deteriorate," Jansson said in the summary of a speech published on the central bank's website.

"And if that does not happen, as I see it, the threat to being able to cut the interest rate in May will instead come mainly from the postponement of the rate-cutting plans of other central banks," he added. Jansson said inflation developments in the United States, where price pressures have proved stickier than expected, were a concern, but added that Sweden had a clearer downward trend in inflation.

"I don't think we will have the same problem as the U.S. in getting inflation down the last little bit," he said. "That's my hope and belief."

However, Jansson said that if the prospect for cuts by the Federal Reserve this year disappears completely, that could affect monetary policy in Sweden and in Europe. Consumer prices

in the United States increased more than expected in March, reducing

the chance for a first interest rate cut by the Federal Reserve before the end of summer. Swedish inflation figures for March are due on Friday. The Riksbank publishes its next monetary policy decision on May 8.

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