The entire world market is looking towards the US central bank tonight. The Federal Reserve, which must keep the monetary value of the largest currency in the world stable, chose to reduce the interest rate from the range of 5.25 to 5.5 percent. In advance, experts and investors were unsure whether the central bank would cut interest rates by 0.25 or 0.5 percentage points. The result was 0.5 percentage points. The key interest rate in the USA is thus down to the range of 4.75 to 5 per cent. The interest rate cut had an immediate impact on the Norwegian krone, which strengthened against both the dollar and the euro. But the excitement is not over yet. At 20:30 Norwegian time, central bank governor Jerome Powell will elaborate on what was behind the interest rate decision. This speech follows the financial market with a watchful eye. Small details in the statements can create big movements in the market. Inflation has plunged According to the American central bank (FED), the time had come for an interest rate cut because inflation has slowed down sharply after the peak of 9 per cent in June 2022. In comparison, the latest figures for August showed that prices were 2.5 per cent higher than a year ago. Price growth has not been lower since 2021. Interest calculator The calculator uses the formula for annuity loans to calculate your monthly costs. Nominal interest is used here. This means that there will be an additional transaction fee which will vary from bank to bank. Today’s interest rate is taken from DNB’s mortgage interest rate for young people, and different banks will have different interest rates. The figures given here will therefore be approximate for you. Monthly expenses are interest and repayments combined. Read more about sources and reservations here. See how much you have to pay if the interest rate increases. The central bank in the USA has a target that prices should not increase by more than around 2 per cent a year, and now the central bank believes that the target is well within reach. But the market has recently been worried that the central bank may be late in starting the interest rate cut. The hope all along has been that inflation would be pushed down to 2 percent without slowing the economy into recession. Interest rates affect the economy well into the future, and at the beginning of August the stock markets plummeted because the unemployment rate in the US increased slightly more than expected. Fears then increased that interest rates had slowed down the economy so much that bad times were around the corner. Expect unchanged interest rates in Norway Economists assume that Norway cannot lower interest rates until Europe and the US cut interest rates. The reason is, among other things, the weak krone exchange rate, which is affected by the interest rate differential between countries. In Norway, it is expected that the key interest rate will remain unchanged at 4.5 percent on Thursday. Then the central bank also presents its plans for interest rate setting going forward, and the tension is mostly linked to whether there will be an interest rate cut in December or in 2025. Policy rate in percentage The policy rate is set eight times a year by Norges Bank. The policy interest rate governs the interest rates in the banks, and affects your housing costs. The aim of setting interest rates is for the high prices to come down again. The forecast tells us how Norges Bank thinks interest rates will develop in the future. Read more about sources and reservations here. A higher policy rate means increased expenses if you have a mortgage 2022 2023 2024 2025 2026 2027 Forecast Norges bank Published 18.09.2024, at 20.00 Updated 18.09.2024, at 20.09
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First interest rate cut in the USA since 2020 – news Norway – Overview of news from different parts of the country
