Anything other than another Norges Bank hold in rates would be a significant surprise to markets.
MNI (LONDON) - EXECUTIVE SUMMARY
- Norges Bank has signalled since September that policy rates will likely be kept at 4.50% through the end of 2024. As such, anything other than another hold in rates would be a significant surprise to markets.
- The September MPR rate path assigned a near-certain implied probability of a 25bp cut in Q1 2025, so it won’t be a surprise for Norges Bank to signal such an intention in the December policy statement.
- The December decision includes an updated MPR and rate path projection. Immediate focus for markets will be on whether Norges Bank indicates that a cut is more likely in January (an interim meeting) or March (an MPR meeting).
- Focus will then turn to the path for easing through 2025 and 2026. It is likely that the December rate path will be revised a little higher through the forecast horizon, tilting towards three rather than four cuts in 2025.
- Analysts are unanimous in expecting Norges Bank to remain on hold in December, with most looking for the first cut to be delivered in March.
SEE HERE FOR THE FULL PUBLICATION: MNI Norges Preview - 2024-12.pdf
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