After a long period of low interest rates, Swedish households have faced a rapid increase in interest rates, making it relevant to examine how monetary policy changes affect households' economic assessments. This thesis aims to examine how Swedish consumer confidence is affected by expansionary and contractionary interest rate shocks, and whether the response differs between younger and older households. The study also analyses how media coverage of economic policy uncertainty affects sentiment, as well as whether interest rate shocks are reflected in households' actual consumption. The analysis is based on monthly data for the period 2004–2025 and is estimated using local projections (LP), where one-month SEK overnight index swap (STINA) is used as an instrument to identify unexpected monetary policy shocks. The results show that contractionary interest rate shocks initially affect consumer confidence more strongly than expansionary shocks. This may indicate a short-term asymmetry in households' responses, which can be related to assumption of loss aversion in prospect theory. At the same time, only limited differences are found between younger and older households, although younger households display a somewhat more volatile response over time. 

The study also finds that media coverage, measured by the economic policy uncertainty index (EPU), has relatively limited effects on consumer confidence compared with the interest rate shocks. This suggests that households' economic assessments are influenced more by actual monetary policy changes than by reporting on economic and political uncertainty. The results for consumption further show that responses vary across consumption categories. Motor vehicle and restaurant sales display clearer response patterns than more necessary consumption, such as food. This indicates that the effects of interest rate shocks differ across consumption categories and are more pronounced for more interest-sensitive consumption. 

The study contributes to the literature on the transmission of monetary policy by analysing asymmetric effects on consumer confidence. By also considering age differences, media coverage and actual consumption, the study provides a broader understanding of how monetary policy affects Swedish households' economic assessments and behaviour.