Sweden Just Slashed Interest Rates To Zero In Fight To Get Out Of Deflation | ||
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Sweden's central bank, the Riksbank, just slashed its main interest rate to zero. That's zero as in nothing, nada, 0%. It's a rare move for a central bank. Normally, central banks that want to boost their economies and fuel a bit of inflation like to keep their interest rate nominally above zero — at 0.25% or 0.5% — in order to maintain the fig leaf that they're not targeting a "no-interest" interest rate. Being just above zero still gives you one last weapon to use, in the form of a cut to zero, in case things get really bad. But in Sweden, the figleaf has now been abandoned altogether. They're now looking at negative interest rate territory as the next place to go — a situation most people only hear about in theory in macroeconomic classes. The European Central Bank started flirting with that policy in June. The country doesn't use the euro, but like the rest of the eurozone it is also mired in a low inflation and deflation scenario. The most recent inflation data for September recorded a 0.4% drop in prices compared to the same month last year. Like the European central Bank, the Riksbank tried to hike interest rates as the economy appeared to be recovering in 2011. It's since been forced into an embarrassing u-turn.
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Markets Are Climbing | ||
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Good morning! European markets have seen a decent rally Early Tuesday. Here's the scorecard, so far: France's CAC 40 is up 0.72% Spain's IBEX is up 1.30% Italy's FTSE MIB is up 1.58% Britain's FTSE 100 is up 0.64% Germany's DAX is up 1.46% Asian markets closed mixed again. The Nikkei closed down 0.38%. The Hang Seng closed up 1.63%. US futures are up too. The S&P is up 10.50 points and the Dow is up 79 points. It's a quiet day for data from Europe today, but there's a bundle from the US later on. At 7.30 a.m. ET, durable goods orders are out, with economists expecting a 0.5% boost in September. The Case-Shiller house price index is out at 10 a.m. ET, followed by consumer confidence an hour later. SEE ALSO: Russian Ruble Hits An All-Time Low Against The Euro Join the conversation about this story »  | ||
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Russian Ruble Hits An All-Time Low Against The Euro | ||
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The ruble today hit its lowest exchange rate against the euro since the creation of the European single currency in 1999. Russia's currency crossed 54 rubles to the euro in early trading, the first time it has crossed that level, on the back of months of weakening against major currencies.
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