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 raised to 0.25% as Norges Bank exit emergency policy stance
- Bank name check December as the when the key rate will likely next be hiked
- Front-end of the rate path unchanged, but longer-end boosted to indicate a terminal rate of 1.68%
The Bank cited confidence in the economy's upswing through the rest of 2021, with a higher domestic vaccination rate countering the rise in infection levels. They acknowledged that while underlying inflation remains low, burgeoning wage pressures and persistently high activity levels will feed into an inflation rate that creeps back towards their 2% target.
While the bank's statement focused on the near-term strength in the Norwegian economy, they made little change to the front-end of the rate path projections, with no material gap opening in policy forecast until early 2023. The bank appear to have adopted the view that the near-term improvement in activity will chew through the output gap, leaving an economy running close to capacity. While their timeline for Norway erasing the negative output gap is unchanged at Q4 this year, the recovery is now expected to be much more aggressive.
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.