Sweden’s Central Bank Cuts Key Rate and Sees Two or Three More Cuts This Year

Sweden’s central bank cut its key interest rate for the second time this year and indicated it is likely to lower borrowing costs again as a faltering economy threatens to push inflation further below its target.

The Riksbank cut its key rate to 3.5% from 3.75%, in line with a poll of economists conducted by The Wall Street Journal ahead of the decision.

“If the inflation outlook remains the same, the policy rate can be cut two or three more times this year, which is somewhat faster than the Executive Board assessed in June,” the Riksbank said.

At its last meeting in June, the central bank suggested it could cut the policy rate two or three times during the second half of the year as long as the outlook for inflation holds.

After peaking at over 10% at the end of 2022, the pace of inflation in Sweden has slowed sharply, with the bank’s target measure dropping below the 2% target in both June and July. At the same time, the economy contracted by 0.8% in the three months through June, while household consumption remains weak and the labor market continues to deteriorate.

In its statement Tuesday, the Riksbank said inflation is now stabilising close to the target and the risk of inflation becoming too high again has declined significantly. At the same time, it said wage increases are moderate, while the growth outlook in Sweden and abroad is somewhat weaker than expected.

“The overall picture of the economy is worrisome and warrants more easing,” says Bartosz Sawicki, market analyst at Conotoxia. “Consumption remains in the doldrums, and GDP growth is set to account for about 0.5% year-on-year in 2024.”

Policymakers have been especially concerned about lowering borrowing costs too quickly over concerns that it would weaken the Swedish currency further and contribute to a bounce in inflation, but those risks are also dissipating as interest rates have declined abroad, easing depreciatory pressure on the krona.

Conotoxia expects the krona will continue to recover in the remainder of the year on the back of improving global risk sentiment. “Hefty market pricing of looming rate cuts should limit the downside for the currency,” Sawicki says.

The European Central Bank began its easing cycle in June, and although it took a wait-and-see approach at its most recent meeting, it kept the door open for further rate cuts this year.

In the U.S., the Federal Reserve has so far held off making its first move and last month held interest rates steady in a range between 5.25% and 5.5% for an eighth consecutive meeting.

However, weaker-than-forecast U.S. nonfarm payroll data earlier this month sparked recession concerns and prompted markets to ramp up bets for interest rate cuts. These rate cut expectations have since been trimmed following stronger data, but a September cut is largely expected by markets and Fed Chair Jerome Powell ’s speech at the Jackson Hole Symposium on Friday will be closely watched for clues.

The number of U.S. billionaires in the world reached 870 in mid-January, outpacing the number in China for the first time in 10 years, according to a snapshot of the wealthiest in the world by the Hurun Report.

The U.S. gained 70 billionaires since last year, powered by a rising stock market, a strong dollar, and the insatiable appetite for all things AI, according to the 14th annual Hurun Global Rich List . China gained nine billionaires overall for a total of 823. Hurun is a China-based research, media, and investment group.

“It’s been a good year for AI, money managers, entertainment, and crypto,” Rupert Hoogewerf, chairman and chief researcher of the Hurun Report, said in a news release. “It’s been a tough year for luxury, telecommunications, and real estate in China.”

Overall, the Hurun list—which reflects a snapshot of global wealth based on calculations made Jan. 15—counted 3,442 billionaires in the world, up 5%, or 163, from a year ago. Their total wealth rose 13% to just under $17 trillion.

In November, New York research firm Altrata reported that the billionaire population rose 4% in 2023 to 3,323 individuals and their wealth rose 9% to $12.1 trillion.

Elon Musk, CEO of electric-car maker Tesla and right-hand advisor to President Donald Trump, topped the list for the fourth time in five years, with recorded wealth of $420 billion as of mid-January as Tesla stock soared in the aftermath of the U.S. election, according to Hurun’s calculations.

The firm noted that Musk’s wealth has since nosedived about $100 billion, falling along with shares of Tesla although the EV car maker is benefiting on Thursday from Trump’s 25% tariff on cars made outside the U.S.

According to the Bloomberg Billionaires Index, Musk’s wealth stood at about $336 billion as of the market’s close on Wednesday, although measuring his exact wealth —including stakes in his privately held companies and the undiscounted value of his Tesla shares—is difficult to precisely determine.

The overall list this year contained 387 new billionaires, while 177 dropped off the list—more than 80 of which were from China, Hurun said. “China’s economy is continuing to restructure, with the drop-offs coming from a weeding out of healthcare and new energy and traditional manufacturing, as well as real estate,” Hoogewerf said in the release.

Among those who wealth sank was Colin Huang, the founder of PDD Holdings —the parent company of e-commerce platforms Temu and Pinduoduo—who lost $17 billion.

Also, Zhong Shanshan, the founder and chair of the Nongfu Spring beverage company and the majority owner of Beijing Wantai Biological Pharmacy Enterprise , lost $8 billion from “intensifying competition” in the market for bottled water. The loss knocked Zhong from his top rank in China, which is now held by Zhang Yiming founder of Tik-Tok owner Bytedance. Zhang is ranked No. 22 overall.

Hurun’s top 10 billionaires is a familiar group of largely U.S. individuals including Jeff Bezos, Mark Zuckerberg, and Larry Ellison. The list has France’s LVMH CEO Bernard Arnault in seventh place, three notches down from his fourth ranked spot on the Bloomberg list, reflecting a slump in luxury products last year.

Nvidia CEO Jensen Huang is ranked No. 11 on Hurun’s list as his wealth nearly tripled to $128 billion through Jan. 15. Other AI billionaires found lower down on the list include Liang Wenfeng, 40, founder and CEO of DeepSeek, with wealth of $4.5 billion and Sam Altman, CEO of OpenAI, with $1.8 billion.

Also making the list were musicians Jay-Z ($2.7 billion), Rihanna ($1.7 billion), Taylor Swift ($1.6 billion), and Paul McCartney ($1 billion). Sports stars included Michael Jordan ($3.3 billion), Tiger Woods ($1.7 billion), Floyd Mayweather ($1.3 billion), and LeBron James ($1.3 billion).

Wealth continues to surge across the globe, but Hoogewerf noted those amassing it aren’t overly generous.

“We only managed to find three individuals in the past year who donated more than $1 billion,” he said. Warren Buffet gave $5.3 billion, mainly to the Bill and Melinda Gates Foundation, while Michael Bloomberg —ranked No. 19 with wealth of $92 billion—gave $3.7 billion to various causes. Netflix founder Reed Hastings, ranked No. 474 with wealth of $6.2 billion, donated $1.1 billion.

Sweden’s Central Bank Cuts Key Rate and Sees Two or Three More Cuts This Year

The Riksbank cut its key rate to 3.5% from 3.75%

The U.S. now has more billionaires than China for the first time in a decade, driven by AI and a booming stock market.