What we need to carry with us Before saying a few words about the way forward for monetary policy in the new environment, I would like to dwell for a moment on the question of what expectations there should be about monetary policy. The fact is that we are  8 [13]  emerging from a period in which this question has, in a sense, been brought to a head. Monetary policy in recent years has been focused on bringing inflation up to the target, while consideration of other circumstances in the economy has basically had to take a back seat. I am thinking here primarily of the risks of various negative side-effects from the low level of interest rates. This is an experience we carry with us as we go forward. And it is not only of significance for monetary policy. Confidence in the inflation target cannot be taken for granted For a long time, the Riksbank has been expressing concern for the risks posed to the economy by household indebtedness and rising housing prices. And during the period up until 2014, these risks periodically had some influence on ratesetting. As always, however, it was the economic outlook and inflation prospects that directed the focus of monetary policy. But the Riksbank made use of the flexibility in inflation targeting to help subdue debt accumulation and housing price increases to some extent. This was done by keeping the repo rate marginally higher than was justified by the outlook for inflation alone.
But such a turnaround requires considerable caution, in my opinion. As regards the Riksbank’s holdings of government bonds, we presented an overall strategy for normalisation before Christmas. 2 In brief, it states that the Riksbank shall continue to reinvest redemptions and coupon payments until the repo rate  See the article “The Riksbank’s strategy for a gradual normalisation of monetary policy” in the December 2017 Monetary Policy Report. 2  3 [13]  has reached a suitable level. Thereafter, reinvestments can also be scaled back. When this happens, bond holdings will decrease. What the environment looks like going forward Economically, things look relatively good and if everything goes as expected, monetary policy internationally and in Sweden will gradually and slowly move closer to a normal situation. But in what kind of environment will monetary policy be conducted going forward? And what does this normal situation actually look like? These are questions that have come increasingly into focus in recent years. It would probably be a mistake to take it for granted that the same map used before the crisis can be used to get our bearings in the current situation. To begin with, it is important to properly evaluate the experience gained over the last decade and integrate the lessons learned into our economic thinking. Structural changes may also have influenced underlying trends in the economy and I would like to give three examples of such changes which, in some way or other, will influence Swedish monetary policy in the future.