MNI Norges Bank Review: Sep '24 - Easing To Begin In Q1 '25
Sep-20 08:11By: Emil Lundh
Norway
MNI (LONDON) - EXECUTIVE SUMMARY
- Norges Bank held its policy rate at 4.50% as unanimously expected, and signalled that it will likely remain at current levels through this year, before “being gradually reduced from 2025 Q1”.
- The updated policy rate path saw a small downward revision through the forecast horizon, signalling a ~20% probability of a 25bp cut in December and near-certainty of such a move by the end of Q1 2025. Overall, the downward revisions appear a little smaller than had been expected by some analysts coming into the decision.
- This elicited a hawkish reaction in markets, which were disappointed that the Norges Bank did not more explicitly open the door to a December cut. We had flagged in our preview that the risks appeared skewed in a hawkish direction.
- The decision prompted some analysts to push back their forecasts for the first rate cut.
- Although the Norges Bank will likely remain hawkish for the remainder of this year, the September decision clearly sets the scene for cuts in 2025.
See the full review, with a summary of sell-side analyst views, here:
