Norges Bank Rate Decision Could Go Either Way

Dow Jones
Sep 23

1140 GMT - Norges Bank's rate decision on Thursday could go either way, as there are arguments to hold and to hike, DNB Carnegie senior economist Oddmund Berg writes. DNB Carnegie expects the central bank to stand pat at 4.25%, while noting that the risk of a hike remains substantial. "This remains a marginal decision, with the underlying factors pointing in different directions." On the one hand, the committee has become more concerned about persistent above-target inflation, while energy prices have risen and foreign rate expectations have moved higher. On the other hand, the committee has repeatedly stressed that it will not tighten policy more than necessary. With data since June pointing towards weaker demand, lower inflation and a stronger Norwegian krone, the cost of waiting is low, he says.

 

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