Danske Bank analysts point out that the Norges Bank (NB) has raised the policy rate by 25bp from 0.75% to 1.00% today and the rate path was adjusted upwards, as domestic factors, including the oil price and NOK, more than countered the negative effects of global growth and rates.
Key Quotes
“As Norges Bank clearly supports our view on the relative performance of the economy, we now expect NB to hike rates again in June, and deliver yet another rate hike in December (previous call was one 2019 hike in September).”
“The rate path published in the Monetary Policy Report (MPR) was adjusted upwards until early 2021, and then downwards. Specifically, the rate path indicates that the next hike could come as early as June, and that a third rate hike in 2019 has a more than a 50% probability. Further out the rate path signals slightly more than one hike in 2021 and flattens around 1.75%.”
“We now expect NB to hike rates again in June, and deliver another rate hike in December, taking the policy rates to 1.50 % at the end of 2019.”
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