Norges Bank Preview: Forecasts from five major banks, 25 bps hike, but there could be a hawkish surprise

Norges Bank will announce a new rate decision on Thursday, March 23 at 09:00 GMT and as we get closer to the release time, here are the expectations forecast by the economists and researchers of five major banks regarding the upcoming central bank's Interest Rate Decision.

Norges Bank is expected to hike rates by 25 basis points to 3.0%. At the last policy meeting on January 19, Norges Bank kept rates steady at 2.75%. Updated macro forecasts and expected rate path will come at this week’s meeting.  

Nordea

“We expect Norges Bank to deliver a 25 bps hike, but will not be surprised if they match ECB's 50 bps. A weaker currency, a resilient labour market and higher wage growth mean the central bank has more work to do.”

Danske Bank

“We expect Norges Bank to raise its policy rate by 25 bps to 3.00%. We also expect the bank to signal a further increase, probably in June. This will be reflected in the policy rate path in the new monetary policy report, which will probably also show a possibility of a third hike in late summer/autumn. The reaction in global financial markets to the failure of Silicon Valley Bank has clearly introduced a downside risk to future interest rates. Still, for now, we expect Norges Bank to treat it exactly as that, a risk factor.”

ING

“Norges Bank should hike by 25 bps as previously announced, but the recent developments will likely reduce the willingness to sound hawkish on the future path of rate hikes.”

TDS

“We expect Norges Bank to follow through on its guidance and hike by 25 bps. While the much stronger than expected Jan inflation report combined with a hawkish shift in global central banks suggested that a 50 bps increase might be possible, weak Feb inflation and the global banking turmoil should take this off the table.”

Swedbank

“We expect a 25 bps hike at the March meeting, followed by a signal that the policy rate may be increased further in Q2 and Q3 if financial stability concerns do not worsen, meaning the terminal rate will probably peak at around 3.50%.”