– Important for us when other central banks start cutting – E24

– Important for us when other central banks start cutting – E24

Interest rate meeting decisions from the US and Sweden are among the decisions on the list for next week.

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– The Fed's interest rate meeting is the most interesting thing next week, says Kjerst Hoogland, chief economist at DNB Markets.

The US central bank, the Federal Reserve, is scheduled to announce its decision on the interest rate on Wednesday.

US interest rates have remained unchanged in the 5.25-5.50 percent range since July, the highest level in 22 years.

according to CME FedWatch tool The market expects that approximately 97 percent is likely to remain steady next January.

– The Fed cares a lot about guidance, and rarely provides something unexpected in advance.

Read on E24+

Economists expect many interest rate cuts this year

At its December rate meeting, the Fed indicated it expected three rate cuts in 2024.

DNB Markets expects the first rate cut to take place in June, after which the rate will be cut at every second meeting.

There was a lot of talk about the possibility of a reduction in March, as it was not discussed sufficiently in the previous meeting. There was a lot of buzz over this, with the market taking it as a signal that the first rate cut would come as early as March.

Kjersti Hoogland, Chief Economist at DNB Markets.

Central Bank President Christopher Waller said during a speech earlier in January that the key interest rate is likely to be cut during 2024, but the Fed does not need to rush to do so.

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Waller believes that interest rates should be lowered systematically and carefully. Hoagland agrees.

Waller explained that he wants to see several months of lower inflation before they are ready to cut interest rates. “I took it to mean it was too early to cut interest rates in March,” she says.

What others do is important to Norges Bank

Sweden's central bank, Riksbank, is also holding an interest rate meeting next week.

Kjersti Haugland and DNB Markets expect the key Swedish interest rate to remain unchanged at 4.0%. Previous interest rate forecasts said the first cut would not come until 2025.

However, DNB Markets believes the first cut will come in June this year.

If we want to do it right, they need to get clearer signals indicating early cuts, says Hoagland.

Erik Thedén, President of the Riksbank.

The chief economist says that Sweden's interest rate decision does not have a direct impact on Norway, but it is nonetheless important to follow developments in the countries around us.

– In general, it is important for us that other central banks start lowering interest rates. It seems unlikely that Norges Bank will cut before others join in.

On Thursday, the Bank of England will also announce its interest rate decision. There, the interest rate is expected to be maintained at 5.25 percent, according to a survey conducted by Bloomberg.

Eurozone inflation and “non-farm payrolls”

After several months of decline, the euro zone inflation rate rose to 2.9% in December, compared to 2.4% in November. On the other hand, the core inflation rate fell to 3.4 percent.

Preliminary numbers for January will be published on Thursday. These will be important for timing in the future, according to Kirsty Hoagland.

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It is expected in advance that inflation will fall to 2.7 percent, and core inflation will remain at 3.4 percent, according to Bloomberg.

– If there are surprises on the upside or downside, that can create movements in the markets, says Hoagland.

The European Central Bank (ESB) kept its key interest rate unchanged at 4.0 percent at its January interest rate meeting. DNB Markets expects the first interest rate cut from the European Central Bank to come in June.

Christine Lagarde, Governor of the European Central Bank, kept interest rates unchanged at 4.0 percent at the interest rate meeting on January 25.

On Friday comes the Nonfarm Payrolls Report, a jobs report that shows how many jobs were created outside of agriculture in the United States in the previous month.

In December, 216,000 new jobs were created outside the agricultural sector in the United States. It was clearly better than the expected 175,000. Unemployment remained unchanged at 3.7 percent.

Hoagland expects lower growth than in the previous month, in addition to a steady development in unemployment.

– If the consensus is correct, it means that the labor market is not strong, but it is still strong, says the chief economist.

Results season

Oslo Børs' results season continues in earnest until next week.

On Wednesday, DNB will present figures for the fourth quarter of last year, while Stolt-Nielsen and Prosafe, among others, will have their turn on Thursday.

Investment expert Mads Johansson of Nordnet told E24 earlier in January that there could be significant impacts on individual stocks during this period.

On Wall Street, results season continues as well.

Tech giants Microsoft, Alphabet, Apple and Meta are set to open their fourth-quarter accounts this week.

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Dalila Awolowo

Dalila Awolowo

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