Five interest rate increases on the horizon have made a huge dent in the portfolios of most of us with mortgages. Over the past six months, several well-known economists have questioned whether central bank governors need to be as eager to raise interest rates as they have been.
Were the critics right?
Central Bank President Ida Waldenbache appeared on “Early Tale” to answer whether, in hindsight, she could be more conservative.
On Thursday this week, the central bank governor chose to keep the interest rate unchanged.
Does that mean your critics were right?
– Our assessments of the Norwegian economy are accurate and our task is to ensure that inflation is stable. When we raise the interest rate, it is to bring down inflation. Waldenbash responds that the interest rate decisions we’ve made are in line with that goal.
The interest rate peak has not been reached
She went on to say that even if the interest rate remains quiet in January, it will continue to rise and the next rate hike is likely to come as early as March.
– But when LO’s chief economist broadcasts the idea that you’re taking things too hard, what do you think?
– It is a sign of health that there is a discussion about monetary policy. It is not abnormal to have different ratings.
– Do you think he’s wrong?
We have different assessments of expectations and risk profile than he does
Uncertain economic outlook
– What about the professors who are out there and say the consequences are very dire if you are wrong and tell you to calm down the high interest rates? Does he make an impression?
– We are confident in our assessments, Walden Bache answers
– But do you understand that we, ordinary wage earners, feel uncomfortable when the opinions of famous economists diverge so? When more people think you don’t need to be so strict with us? Are you taking it too hard?
– I understand that more families are getting tighter financing and that this is demanding, hence the uncertain financial outlook. They always will be.
You can withstand higher interest rates
– But when you use a drug that hits ordinary people’s wallets hard. Then we would like to be 100 percent sure that the medication you are using is correct and perhaps most importantly that it has been taken correctly?
– We are confident in our assessments, and most Norwegian families have the financial resources to deal with the increased expenses, says Walden Bach.
– But are you sure that the medicine is correct and, most importantly, that it was taken correctly?
– I am confident in our assessments and if the economy changes, we will adjust the interest rate.
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