The OECD’s Economic Outlook in May 2011 expected the robust growth to continue, with increases in real GDP of on average 3.3 per cent in 2010–2015. It was expected that the policy rate would need to be raised gradually as economic activity improved.6 A similar assessment was made by the International Monetary Fund (IMF) in July 2011. GDP growth was assumed to gradually decline to 3 per cent in 2014, when inflation was expected to amount to 2 per cent (measured in terms of the HICP). It was assumed that the interest-rate increases that had begun would need to continue.7 One conclusion I draw from this is that many unexpected events have occurred in recent years. The situation today is rather different than all analysts – both on the Executive Board of the Riksbank and outside the bank – were expecting at this time. I shall return to this later. Another conclusion is that the general picture was that the Riksbank’s policy was on the whole well-motivated and essentially based on traditional monetary policy deliberations. Although there were different opinions on exactly how high the repo rate should be, as there always are, the policy was thus not perceived as odd or conspicuous.
Neither the Riksbank nor any other analyst perceived the monetary policy conducted to be leaning against the wind to any large extent, and the general impression was definitely not that the repo rate should have been left at the level to which it was cut during the financial crisis, that is, 0.25 per cent. 4  In the minutes, Lars Svensson presents estimates where the dotted yellow repo-rate path is assumed to give an inflation rate of 2 per cent from the beginning of 2013 and onwards and an unemployment rate that would reach what he assumed to be an equilibrium level of 5.5 per cent at the beginning of 2014. It may also be worth noting that at the ensuing meeting, in September 2011, all of the Executive Board members thought that 2 per cent was a suitable level for the repo rate, given the economic situation in Sweden. 5  National Institute of Economic Research (2011). 6  OECD (2011), pp. 191–192. 7  IMF (2011), p. 25 and Table 9. BIS central bankers’ speeches  3  A strange assumption Given this, it is very strange to claim that an evaluation of the Riksbank’s policy should rely on the assumption that the alternative of not leaning against the wind would be to hold the repo rate at 0.25 until today. If no one perceived it as such at the time, it appears very strange to paint this picture retrospectively.