Norges Bank remains a little too pessimistic – Commerzbank
Antje Praefcke, Analyst at Commerzbank, explains that even though Norges Bank raised its rate path slightly and is now signalling that a first rate hike is possible in late 2018 and just like many other central banks, it remained cautious in its outlook.
“The inflation data for October, justified its cautious approach. Following a rise in the summer of 2016 both core and overall inflation fell rapidly again and are now significantly below Norges Bank’s inflation target of 2.5%. Even though Norges Bank remains a little too pessimistic in our view as far as growth is concerned - we will know more on this subject next week once the GDP data for Q3 will be published - it is important for Norges Bank that long term inflation expectations remain anchored. It therefore has every reason to assume a cautious approach.”