Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Executive Summary:
- Main Policy Rate kept unchanged at 0.75%, alongside expectations
- Bank again name checked June, retaining likelihood of a hike at every quarterly forecast meeting
- Acknowledges price rises are lower than expected, but underlying inflation still seen on the up
The Norges Bank stuck to their guidance and kept policy rates unchanged at 0.75% in May. Again, the bank name-checked the June meeting as the next most opportune time to tighten policy, thereby signalling a further three hikes this year, which should bring end-2022 rates to 1.50%. There was little market response to the decision itself, with pricing still eyeing March’s rate path, which sees policy rising well north of neutral, to 2.50% by end-2023.
The accompanying policy statement added few fresh clues for the upcoming June rate path revision, but the language around the economic situation left the door open for a further upward revision in projections across the coming months. While an interim meeting hike or a move of more than 25bps remains unlikely, a further focus on the wage-price spiral in coming meetings could prompt markets to re-price more hawkishly.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.