Norges Bank Holds Rate at 4.5%, Signals Possible Cut Next Month

Norges Bank is keeping its key policy rate at 4.5% following its May meeting, but hints from central bank officials suggest a cut could come as early as June. The decision, made by the Monetary Policy and Financial Stability Committee, was announced on May 8 and will take effect immediately. The rate has remained unchanged since December 2025, as core inflation measured by CPI-ATE is still running high at 3.2% in April, well above the 2% target. This is a notable drop from 3.6% in March, giving the central bank room to consider easing. Governor Ida Wolden Bache said on May 1 that "the economy is cooling, but we need more evidence of sustained inflation decline." The Norwegian krone has weakened by 2% against the euro, which could increase the cost of imported goods and keep inflation hotter for longer. Markets widely expect the bank to hold steady this month, with a 60% probability of a cut in June. The decision was published at 10:00 CEST, triggering a spike in search traffic as investors and analysts analyzed the forward guidance for clues about future monetary policy.