(Nettavisen): On Wednesday evening, the US central bank, the Federal Reserve (Fed), presented its interest rate decision.
There it emerges that they are keeping the key interest rate unchanged, in the range of 5.25 to 5.5 per cent, the highest in 23 years. It is the sixth interest rate meeting in a row where the bank chooses to keep interest rates stable. The bank refers to a “lack of progress” towards the target of inflation of two per cent.
This is bad news for Norwegians because the level of Norwegian interest rates is affected by what happens internationally. The krone exchange rate can be strongly affected if Norges Bank lowers interest rates before other important economies, such as the USA.
Therefore, economists and Norges Bank paid close attention to what was presented on Wednesday evening.
Greatest influence
When Nettavisen spoke to chief economist Kyrre Knudsen at Sparebank 1 SR-Bank last week, about American inflation, he said this about interest rates:
– The American interest rate is so important that it affects interest rates in most countries, including Norway. Developments in the US are therefore important for the interest rate outlook in Norway.
At the same time, “everyone” follows the American central bank (Federal Reserve, Fed) because they are the world’s largest economy.
– No one has a greater influence on the financial markets than the US central bank. The US interest rate is a reference interest rate for most central banks. Therefore, what the Fed does is included in practically every calculation in the world, explained Knudsen.
He went on to say that real changes, but also rumours, signals and speeches from the Fed, directly affect the markets.
