United States, Inflation | Interest rate bomb from the USA – top bank warns Norwegians with mortgages

There is great excitement about the inflation figures from the United States, which came at 2:30 p.m Norwegian time.

Inflation increased more than expected in March, writes Finansavisen. The annual increase in inflation is now 2.7, while core inflation is on 2.8 percent.

– No interest rate cut

– It is confirmation that growth and activity in the USA is so high that there will be no interest rate cuts this year, says chief economist Elisabeth Holvik in the Sparebank 1 group to Nettavisen.

It was not long ago that the FED hinted at seven rate cuts this year:

– The risk that they will have to raise interest rates has now increased. This is dramatic for the capital market, which is experiencing capital being moved to the USA. If you have debt in dollars, it will be very expensive. This is difficult for Norges Bank: The krone is under pressure.

– Bad news

Central bank governor Ida Wolden Bache’s belief in an interest rate cut in September is far less certain now:

– An interest rate cut in Norway before the US could weaken the krone further. This is bad news for anyone who wants an interest rate cut here as well. The governor of the central bank will probably have to comment on this at the next interest rate meeting, says Holvik.

The American economy is doing so well, which is bad news for the interest rate path in Norway. When inflation in the USA is high, you can thus import price growth into Norway through trade.

At the same time, the krone exchange rate can be strongly affected if Norges Bank lowers interest rates before other important economies.

Jokes for interest rate cuts

Inflation in the US rose again in March, with 3.5 per cent, which puts the expected interest rate cut in June at risk.

The so-called core inflation was unchanged from the previous month at 3.8 per cent.

– It is a little higher than expected. It takes time to bring down inflation in the USA, and this pulls the interest rate up somewhat, said chief economist Kyrre M. Knudsen from Sparebank1 SR-Bank then.

Thus, there is talk of an interest rate cut in the US in June:

– This could also challenge the image in Norway, as Norges Bank is unlikely to cut interest rates before the US, he says.

The price development of fuel, house rental and car insurance is among the factors that drive up inflation.