Nordic Outlook

After a late-summer bout of stock market turbulence, falling interest rates and a weaker dollar, markets have calmed down and adapted to US economic deceleration and expected Fed rate cuts. The fight against inflation has been successful, and central banks are on the way to taking clearer steps towards interest rate normalisation. The Fed will start its rate cutting cycle in September with at least a 25-basis point reduction. Growth gaps are narrowing as the United States and China slow down and the euro area accelerates at a moderate pace. Continued resilient labour markets, rising real wages and lower interest rates will drive growth.