Norges Bank: Nordea expects rate path to remain steady

4.5% is the policy rate Nordea’s Kjetil Olsen expects Norges Bank to maintain next Thursday. That would be consistent with September’s rate path. The data are mixed, he notes: core inflation and energy prices are slightly higher, while the NOK is stronger and retail sales weaker. Olsen expects the bank’s communication to remain largely unchanged. He considers rate cuts unlikely until inflation clearly converges towards the 2% target, something he does not expect before 2028.

4.5% Policy Rate: Inflation Outlook

"Norges Bank will keep its key rate unchanged at 4.5% next Thursday, in line with the rate path presented at the September meeting."

"In addition, oil and gas prices have risen, as have electricity futures."

"On the other hand, the stronger NOK points in the opposite direction."

"Overall, if Norges Bank were to publish a new rate path today, we believe it would be very close to the September path at the front end, perhaps marginally lower, but somewhat lower further out."

"We believe Norges Bank needs to see clear evidence that inflation is converging towards the 2% target before signalling rate cuts."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)