*
Riksbank hiked on April 26 to 3.50% from 3.00%
*
Said it would hike again by quarter point in June or Sept
*
Incoming data will be key
(Adds further central bank quotes)
STOCKHOLM, May 9 (Reuters) - Swedish inflation should
fall back this year and the pace of rate hikes may slow, but
economic uncertainty was high and policy could change depending
on incoming data, the minutes of the central bank's most recent
policy meeting showed on Tuesday.
The Riksbank announced a half-percentage-point hike to 3.50%
on April 26 and said it would probably tighten policy again, by
a quarter point this time, in either June or September before
its hiking cycle comes to an end.
But worries remain that inflation could prove stickier than
expected and some policymakers have not ruled out tougher
measures such as a steeper rate hike.
"If the information about Swedish inflation and economic
developments point towards increased or prolonged inflationary
pressures, I will advocate a higher policy rate than is
indicated in our interest rate path," Central Bank Governor Erik
Thedeen said in the minutes.
At the April meeting, deputy governors Martin Floden and
Anna Breman wanted the Riksbank to slow the pace of hikes
immediately.
"This would allow us to keep our options open for other courses of action later in the year, including the possibility of a return to larger increases if inflation should become entrenched on a high level," Breman said in the minutes.
"At the same time, a gradual approach to further tightening would reduce the risk of negative side effects."
Central banks around the globe need to strike a delicate balance, as high inflation lingers but economies are slowing and households struggling with soaring food, energy and mortgage costs.
The U.S. Federal Reserve has shifted down the gears, raising
rates by just a quarter point earlier this month in what may be
its last step higher during this cycle.
The European Central Bank hiked its deposit rate by a
quarter percentage point to 3.25% on May 4 and said it would
keep going.
Markets see at least one more hike by the ECB. The Riksbank is also expected to hike rates to at least
keep pace with the ECB or risk an even weaker crown. "If the krona continues to weaken, which in turn affects
inflation, we need to take this into account in monetary
policy," Thedeen said.
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Swedish rates and inflation: ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Stockholm Newsroom; editing by Niklas Pollard and
Bernadette Baum)
