TD Securities reports that Norges Bank left its policy rate unchanged at 4.00%, in line with expectations, but shifted guidance toward a base case of at least one rate hike in 2026. The bank highlights domestic inflation pressures and the energy shock as key drivers, while uncertainty around the Middle East conflict delayed action. The next Norges Bank meeting is now considered live.

Norges Bank keeps rate but turns more hawkish

"The Norges Bank kept the policy rate unchanged at 4.00% (TDS/mkt: 4.00%) but shifted their guidance from the 2026 cuts mentioned at the January meeting to a base case of at least one hike throughout the year."

"Domestic factors, such as sticky underlying inflation, and the energy shock feed into the need for a tighter monetary policy stance, though the uncertainty about the duration of the Middle East conflict stayed the hand of most members at this meeting."

"Having said that, the hike is now expected by a majority of the Executive Board, shifting the question to 'when' rather than 'if' and making the next meeting live."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)