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What Will Norges Bank Do? This Could Be the Future Path of Interest Rates
There is an increasing scenario of no further rate cuts. Fot. Adobe Stock, licencja standardowa (zdjęcie poglądowe)
Inflation in Norway remains high. Economists do not rule out that the next move by Norges Bank could be an interest rate hike.
In January, Norway's central bank kept interest rates unchanged. Governor Ida Wolden Bache pointed out the persistently high core inflation. Since autumn 2024, the indicator has remained close to 3 percent. This figure is crucial when making decisions about the level of interest rates.
Inflation May Stand in the Way
On February 10, the Central Statistical Office will publish inflation data for January. According to a Bloomberg survey, both headline and core inflation are expected to be 3 percent. However, DNB Carnegie analysts told E24 that they expect core inflation at 3.1 percent. This would be higher than Norges Bank's latest forecast of 2.9 percent.
According to DNB Carnegie's chief economist Kjersti Haugland, such a scenario could affect plans for interest rates in 2026. Persistently high inflation encourages greater caution regarding cuts. DNB Carnegie expects only one rate cut this year, in June. The central bank itself has signaled the possibility of one or two cuts.
According to DNB Carnegie's chief economist Kjersti Haugland, such a scenario could affect plans for interest rates in 2026. Persistently high inflation encourages greater caution regarding cuts. DNB Carnegie expects only one rate cut this year, in June. The central bank itself has signaled the possibility of one or two cuts.
Inflation data is important for variable-rate mortgages.Photo: stock.adobe.com/standard license
USA, Markets, and a Week of Summaries
This week, the US jobs report, known as Nonfarm Payrolls, will be published. The data shows the employment situation in the world's largest economy. DNB Carnegie expects unemployment to fall to 4.3 percent. The forecasts are based on other studies indicating improved sentiment at the beginning of the year.
According to Kjersti Haugland, concerns about a weakening US labor market have clearly diminished. If the trend continues, it will strengthen the position of some decision-makers in the Federal Reserve (the US central bank), who see no need for further rate cuts. However, DNB Carnegie expects one cut in June, after which the US monetary easing cycle is expected to end.
The week will also bring the publication of financial results from many listed companies. Investors are focusing on seafood sector companies, including salmon producers SalMar and Mowi. Analysts expect significantly higher profits in 2026 compared to 2025, increasing the importance of the announcements made by these companies.
According to Kjersti Haugland, concerns about a weakening US labor market have clearly diminished. If the trend continues, it will strengthen the position of some decision-makers in the Federal Reserve (the US central bank), who see no need for further rate cuts. However, DNB Carnegie expects one cut in June, after which the US monetary easing cycle is expected to end.
The week will also bring the publication of financial results from many listed companies. Investors are focusing on seafood sector companies, including salmon producers SalMar and Mowi. Analysts expect significantly higher profits in 2026 compared to 2025, increasing the importance of the announcements made by these companies.
At the same time, numerous macroeconomic data and quarterly reports from Norway and abroad will be released. On February 12, during the annual Norges Bank dinner, Governor Ida Wolden Bache will give a speech. Her remarks may provide additional signals regarding the future direction of monetary policy amid ongoing inflationary pressure.
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