Norway's central bank governor pledges to bring inflation down

Core Insights - Norway's central bank is committed to reducing consumer price inflation to its 2% target, indicating a cautious stance on further interest rate reductions [1] - The central bank began an easing cycle in 2025, cutting its policy rate by 50 basis points to 4.0%, with plans to gradually reduce borrowing costs towards 2028 as inflation is expected to decline [1] - Unexpected acceleration in Norway's annual core inflation to 3.4% in January from 3.1% in December may lead to a reassessment of the central bank's rate cut plans [1] Economic Outlook - The Norwegian economy is expected to experience a moderate upturn, with household purchasing power anticipated to grow [1] - The central bank governor emphasized the unpredictability of economic outlooks, stating that no promises can be made regarding the policy rate [1] Monetary Policy Communication - Norges Bank plans to provide more insights into its monetary policy committee's discussions this year, aiming for greater transparency without attributing specific views to individual members [1] - The governor supports a Finance Ministry initiative for periodic reviews of the central bank's mandate but cautions against including broader goals like wealth distribution or climate change in monetary policy [1] Sovereign Wealth Fund - Norway's $2.2 trillion sovereign wealth fund faces conflicting expectations regarding responsible investments both domestically and internationally [1]