NORGES BANK: Q4 RNS: Capacity Utilisation Revised Lower

Bunge – Neutral: Prior concerns around weak consumer sentiment readings look to have eased a little. Bunge shares the view that “there are now signs that [economic] developments are taking a turn for the better”. Although the Riksbank’s Business Survey contained weak elements around consumer confidence, the broader Economic Tendency Survey had more encouraging results.

• “Overall, I think that the outlook for an inflation rate close to the target going forward is good.”
• Bunge continues to stress that “the forecast of an inflation rate close to the target going forward is based on a recovery in economic activity”. She believes that “if confidence among households is to continue rising and the recovery is to begin in earnest, I think it is important that the labour market also develops in line with our expectations…There, the signals are rather more mixed”.

Seim – Hawkish leaning: No threat of a hawkish dissent from Seim in November, but she still sees “some risk that inflation could be higher than expected next year”.

• “Although I then [in September] advocated an unchanged policy rate of 2 per cent, this does not mean I would suggest raising the rate to that level today. We normally aim to avoid this type of erratic monetary policy and, given that the policy rate was actually cut, I assess that the current level provides the best conditions for a stable development going forward.”
• Her reasons for seeing upside inflation risks are “(i) the risk that the announced cut in VAT on food in April next year does not have the impact on consumer prices that we assumed in our forecast in September; (ii) that actual sentiment and demand pressure in the economy are not yet visible in the outcome data we have access to; and (iii) that lower public and private saving going forward could mean that the neutral interest rate becomes somewhat higher”.
• While hawkish leaning on net, Seim still acknowledges some downside risks to activity. 

Overall, the Riksbank November minutes feel neutral relative to last week's policy decision. The base case that the policy rate is likely to remain at 1.75% for "some time to come" holds. SEK has strengthened modestly this morning, but that's also come alongside NOK strength so doesn't appear related to the minutes. 

Summarising the views of the remaining three Riksbank Executive Board members below (a reminder that the Riksbank is still looking for a replacement for Anna Breman).

Jansson – Dovish leaning: Considers policy to be in a “good place” (openly taking inspiration from ECB President Lagarde). However, he retains a dovish leaning view on inflation: 

• “My view that there are a limited number of upside risks to inflationary pressures, while downside risks are gradually becoming more important in the future, is an important starting point for my monetary policy considerations and I will return to this in a moment.”
• Additionally, despite improving signals around the economic activity outlook: “Even if we were to have to revise our forecast for growth upwards in the future, and perhaps ultimately also for the labour market, I am not worried that the recovery will be so strong that it will lead to problems with too high inflation.”

The United States Senate has passed a funding package to reopen the US government. The package, which now heads to the House of Representatives, includes three full-year FY2026 appropriations bills covering agencies related to the Departments of Agriculture, Military Construction and Veterans Affairs, and the legislative branch. Remaining US government agencies will be funded at existing levels through January 30 with a new short-term funding measure (Continuing Resolution).

• House Speaker Mike Johnson (R-LA) - who has kept the House recessed for 54 days - has teed up votes in the House at 16:00 ET 21:00 GMT on Wednesday, November 12, allowing members sufficient time to reach the capital in light of shutdown-related travel delays.  
• Johnson is likely to pass the package under a rule, meaning it will require a vote in the House Rules Committee and then a subsequent simple majority vote on the House floor to move forward to a final up/down vote on the bill. In recent years, House conservatives have made this process difficult due to objections to unscrutinised funding bills and short-term measures. However, conservatives are unlikely to object this time around, with key members of the House Freedom Caucus lining up behind the package, despite the inclusion of three Senate-drafted appropriations bills and a CR.
• While the majority of House Democrats are expected to vote 'no', the bill is expected to be sent to President Donald Trump's desk on Wednesday evening, ending a 43-day government shutdown.