– Debt growth has fallen dramatically in the last year and was the lowest since 1995 in the previous survey. he says.
– I am excited to see whether growth will fall further in line with new interest rate jumps, other conditions that dampen the private economy and sideways developments in housing prices – or whether we are beginning to approach the bottom for debt growth, he adds, pointing out that debt growth for private individuals is lower than both inflation and wage growth.
According to Knudsen, debt growth has fallen because both people and businesses have become more cautious with investments as a result of the interest rate jumps and increased expenses.
– It is natural and is the main reason why Norges Bank has raised the interest rate. So far, the banks themselves have not tightened their credit practices to any particular extent.
Knudsen believes that the lending survey tells a great deal about the economy, both about the supply of money and about the ability and willingness of people and companies to take out new loans, and that it is therefore important information for Norges Bank ahead of the interest rate meeting at the end of the month.
Have to wait for interest rate cuts in the US
The last big macro news for the week will be the US inflation figures on Thursday afternoon. Inflation in the US has been falling for some time, and the chief economist believes it will continue to decline into the new year.
– I think it will continue to fall somewhat from November – when it was 3.1 for overall and 4.0 for core inflation, he says and adds:
– The special thing at the moment is that the market has a much lower interest rate trajectory than the central banks. This is particularly true in the US, where the market believes in as many as six to seven interest rate cuts this year, while the Fed has predicted three.
Knudsen still thinks it will take some time before we see the first US interest rate cut, but says the Fed is watching closely and constantly assessing how ongoing inflation affects their rate path.
– This inflation figure can therefore tip the central bank to speed up interest rate cuts, like the first western country. An interest rate cut in the US will be a milestone that means a lot to all economists, not least here in Norway, says Knudsen.
– On the contrary, a higher inflation figure could have significant market effects, since the interest rate market prices in a rapid decline in interest rates, he adds.
2024-01-07 08:13:59
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