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Preview: Final Pause Before September Hike

NORGES BANK
  • With inflation, growth and the progression of the pandemic & vaccination drive well within the Norges Bank's confidence bands, the Bank are likely to double down on the September meeting for rate lift-off. This leaves August's decision as a final pause before an extended tightening cycle.
  • In June, the board specifically name-checked September as the most probable meeting at which to start normalizing rates. The accompanying policy statement made clear that the conditions needed for a return to "economic normalization" are fast approaching, and as such, higher policy rates are needed across the forecast horizon
  • This language is expected to be re-affirmed this month, with the board strengthening communication around the phrase "the policy rate will most likely be raised in September". It's this messaging element that will be a market focus this month, with no new rate path projections or economic forecasts accompanying the August decision.
  • Full preview here: https://roar-assets-auto.rbl.ms/documents/11592/MNINBPrevAug21.pdf

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