Some economists think the Swedish Central Bank is being too cautious and should reduce interest rates further, write Joel Sherwood and Katie Martin for The Wall Street Journal. Some expect rates to reach 0.25% while the Swedish Bank SEB projects a 0.1% rate.

The Swedish Central Bank may resort to unconventional policies measures, like quantitative easing, as a last-ditch effort to protect the economy if interest rate cuts do not deter deflationary pressures.

  • iShares MSCI Sweden Index (EWD): up 11.2% year-to-date

  • CurrencyShares Swedish Krona Trust (FXS): down 6.4% year-to-date

ETF FXS performance

Read the disclosure, as Tom Lydon is a board member of Rydex Investments.

Max Chen contributed to this article.