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Nordea Boost Norges Bank Rate Top View

NORGES BANK
  • After the CPI release earlier this month, Nordea wrote their conviction for a peak rate at 3.25% has strengthened and the risk is to the upside. Today, they formally update their view with further tightening to 3.75% by Summer/Autumn this year.
  • They write that everything is pointing towards a clearly higher rate top. A technical calculation of the impulses to Norges Bank's rate path indicates an upward adjustment of some 75-80 bp compared to Norges Banks latest forecast from December. As such, they now think Norges Bank will have to become more unpopular to ensure inflation comes back down towards 2%.

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