Earlier Rate Cut In Norway Commerzbank

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Earlier Rate Cut In Norway Commerzbank

Norway'S Inflation Hints At Earlier Rate Cut - Commerzbank

The inflation report from Norway was released last week, which has shown hope that the central bank will now think of an interest rate turnaround.

Out of all the G10 central banks, the only central bank that has yet to cut the rates is Norges Bank. After the recent inflation report from Norway, the hopes of a rate cut have increased tremendously.

According to Commerzbank, the headline inflation in Norway has been below average during the last 10 months. Also, the readings for October were also in line with the target set by the central banks.

Norges Bank May Change Its Policy

As for the core inflation rate, the outcome is also mostly in line with the target set by the central bank. It is safe to assume that Norway has made a lot of progress in achieving the inflation target.

However, that doesn't mean that the possibility of a resurgence in inflation can be completely ruled out. So, there's a slim chance that inflation in Norway will start to rise again in the coming months.

One factor which hints at this possibility is the oil prices which have started to rise once again. The colder months of winter are also ahead of us which will also increase the energy prices across the board. Now, it remains to be seen whether that will be the case or not.

All of this means that instead of waiting for the Summer, the Norges Bank will likely change its interest rate policy a lot sooner.

Right now, the interest rate path defined by the Norges Bank shows that the first rate cut will be coming in March 2025.

However, the Norges Bank could also change its policy in November or December. So, if the first rate cut happens in Nov, Dec, or Jan, that wouldn't be entirely out of line.

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