Live Updates > Live Update Details
2025-09-18 17:47:48
A Hawkish Cut Amidst the Global Interest Rate Cut Wave: (1) The Norwegian Central Bank announced a 25 basis point cut in its policy rate to 4.0%, in line with market expectations. The Norwegian krone rose 0.3% against the euro in response. (2) Although the rate cut was unanimous, the central bank indicated that the pace of future rate cuts would slow. The governor stated that recent data suggests the Norwegian economy still has excess capacity and inflation is likely to remain higher than expected, necessitating the slower rate cuts expected before the summer. (3) The Norwegian Central Bank's latest forecast indicates that it may only cut interest rates once a year over the next three years, potentially lowering the rate to 3.25% by 2028. Some economists predict that, given wage and inflation growth, the central bank may only cut interest rates twice in the next few years, ultimately lowering the rate to 3.5%. (4) Institutional analysis indicates that this rate cut is a "hawkish" one, meaning that while the rate is being cut now, the next one may be a long time away. Some economists predict that the next rate cut may occur in the third quarter of 2026. 5. The central bank is particularly concerned about the unpredictability of international cooperation and trade, believing it creates uncertainty for inflation and growth prospects in Norway and the global economy. 6. A survey by an institution showed that 23 of 30 economists had previously predicted that the Norwegian Central Bank would cut interest rates to 4.0%. 7. The Norwegian Central Bank's rate cut follows the US Federal Reserve's first rate cut since December of last year on Wednesday and hinted at the possibility of further rate cuts. The European Central Bank, on the other hand, kept interest rates unchanged last week.
