Sweden’s central bank on Thursday raised its policy rate back to zero, bringing an end to its experiment with negative interest rates.
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Mikael Sjoberg/Bloomberg News – Click to enlarge
Federal Reserve policy makers opposed to taking interest rates negative in the next recession might take comfort from the end of Sweden’s dalliance with below-zero rates.
But investors shouldn’t expect the neighboring eurozone to follow suit: Just hours after the Riksbank raised its policy rate back to zero on Thursday, a group of the most senior monetary-policy staff at the European Central Bank published a long-awaited paper robustly defending negative rates. The eye-catching claim: The benefits for the economy would still outweigh the damage even if rates went twice as