Central bankers have traditionally been reluctant to prick asset price bubbles but given the bubbly economy of the last 10-15 years, they are becoming more proactive. A case in point is the Swedish central bank, the Riksbank. Their deputy governor said today that house prices are twice as high as disposable incomes compared to the 1980s. Sounds like he is trying to rein in irrational exuberance.
Swedish rates won’t likely go lower but will remain low for likely for the coming year. Their official rate is near the Fed’s, at 0.25%.
