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Nordea Raise Forecast for 2023 Hikes

NORGES BANK
  • Nordea update their view for Norges Bank policy across 2023, and now see the bank raising the key rate "four times this year and four times next year – bringing the key rate to 2.5% by end-2023. Our previous call was for four hikes this year and two more in 2023 (implying a key rate at 2% in 2023).
  • They see this rate as above the neutral level estimated by the bank board, with the Q1 Regional Network survey showing an economy that has gone from warm to reaching boiling point.
  • The domestic economy has been faring much better than foreseen by Norges Bank in December when Omicron clouded the outlook, and the unemployment rate will fall further ahead.

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