Norges Bank Minutes comparison — 8 May 2025 vs 19 June 2025

This Norges Bank minutes comparison covers 8 May 2025 and 19 June 2025. Overall, the newer document was more dovish. The June statement delivers a clear dovish pivot: the first rate cut of the cycle, supported by faster disinflation and a softening labour market. The committee's guidance for further cuts in 2025 and acknowledgment of downside risks signal that the next decision will likely be another reduction, barring a material reversal in data.

What changed

More dovish. The June statement delivers a clear dovish pivot: the first rate cut of the cycle, supported by faster disinflation and a softening labour market. The committee's guidance for further cuts in 2025 and acknowledgment of downside risks signal that the next decision will likely be another reduction, barring a material reversal in data.

Inflation — More dovish. Inflation outlook improved with underlying inflation declining faster than expected, shifting from above-target concern to easing bias.
Labour Market — More dovish. Labour market weakened more than expected, with rising unemployment and increased spare capacity, supporting easing.
Rate Path — More dovish. Policy rate cut by 25bp to 4.25% with guidance for further reductions, marking the start of an easing cycle.
Balance Sheet — Little changed. No mention of balance sheet policy in either document; unchanged.

Key wording

8 May 2025

At its meeting on 7 May 2025, the Committee decided to keep the policy rate unchanged at 4.5 percent.
rate path: Explicit decision to hold rate steady at 4.5%.

Norges Bank’s Monetary Policy and Financial Stability Committee decided to keep the policy rate unchanged at 4.5 percent at its meeting on 7 May.
rate path: Policy rate held at 4.5%, no change.

There is uncertainty about future economic developments, but the Committee’s current assessment of the outlook implies that the policy rate will most likely be reduced in the course of 2025.
rate path: Signals a cut later in 2025, dovish tilt.

the Committee’s current assessment of the outlook implies that the policy rate will most likely be reduced in the course of 2025.
rate path: Signals a cut later this year, reinforcing easing bias.

Inflation has fallen markedly from the peak but is still above the 2 percent target.
inflation: Confirms disinflation progress but remaining above target keeps caution.

The Committee gave special attention to the fact that this may pull the interest rate outlook in different directions. On the one hand, the global growth outlook appears to be weaker, and oil prices have fallen. Norway’s main trading partners are now expected to make more rate cuts than previously. On the other hand, the krone has weakened somewhat and been weaker than assumed.
rate path: Two-sided risks: weaker growth vs weaker krone.

19 June 2025

At its meeting on 18 June 2025, the Committee decided to reduce the policy rate from 4.5 percent to 4.25 percent.
rate path: First rate cut after holding at 4.5% since Dec 2023; signals start of easing cycle.

Norges Bank’s Monetary Policy and Financial Stability Committee unanimously decided to reduce the policy rate from 4.5 percent to 4.25 percent at its meeting on 18 June.
rate path: Rate cut signals easing cycle has begun.

The economic outlook is uncertain, but if the economy evolves broadly as currently projected, the policy rate will be reduced further in the course of 2025.
rate path: Conditional guidance for additional cuts later this year.

The Committee judges that a restrictive monetary policy is still needed but that it is now appropriate to begin a cautious normalisation of the policy rate.
rate path: Signals first rate cut, marking a shift from tight stance.

Since March, underlying inflation has declined somewhat faster than expected, and the inflation outlook for the coming year indicates somewhat lower inflation than previously expected.
inflation: Inflation surprise lower supports the case for easing.

An escalation of conflicts between countries and uncertainty about future trade policies may result in renewed financial market turbulence and could impact both Norwegian and international growth prospects.
rate path: Highlights downside risks from trade wars; could warrant more easing.

Official documents

Background reading

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