Norway central bank cuts rates in surprise move
OSLO (Reuters) -Norway's central bank cut its policy interest rate by 25 basis points to 4.25% on Thursday, its first reduction of borrowing costs in five years, in a decision that took most analysts by surprise.
"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," Norges Bank said in a statement.
The Norwegian crown currency weakened to 11.55 against the euro by 0805 GMT, from 11.48 just before the announcement.
Norges Bank in May maintained its interest rate at 4.50%, the highest level since 2008, after it postponed in March a long-planned monetary easing due to an unexpected rise in consumer prices.
Of the 26 economists in the June 11-16 poll, 23 predicted Norges Bank's key interest rate would stay at 4.50% on Thursday, while three expected a cut to 4.25%.
"Inflation has declined since the monetary policy meeting in March, and the inflation outlook for the coming year indicates lower inflation than previously expected," Norges Bank Governor Ida Wolden Bache said in a statement.
"A cautious normalisation of the policy rate will pave the way for inflation to return to target without restricting the economy more than necessary," she added.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CBS News
31 minutes ago
- CBS News
Is a high-yield savings account worth it in today's economy? Here's what savings experts think.
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. If you want to earn more interest on your money, it could be time to open a high-yield savings account. Getty Images While there are numerous interest-bearing deposit accounts for savers to consider, high-yield savings accounts have become a popular financial tool. These accounts are easy to open from the convenience of your own home, thanks to the wide variety of online banks that offer them. And unlike traditional savings accounts, high-yield savings accounts allow you to earn hefty returns on your savings. Like other savings tools, though, the potential returns on high-yield savings accounts are largely dependent on the economic climate. These accounts were especially worth considering in recent years, as interest rates were high overall thanks to the fight against elevated inflation. When the Federal Reserve lowered the federal funds rate in late 2024 and early 2025, though, many high-yield savings account rates dropped in tandem. That, in turn, led to questions about whether it was really worth it to open this type of savings account. Whether a high-yield savings account is ultimately worth it for you depends on a range of factors, including your savings goals and liquidity needs, so you'll need to weigh all the factors to determine whether opening one is the right move. But to help you decide, we spoke with savings experts to find out if these accounts are still worth it in today's economic climate. Find out how to earn more with the right high-yield savings account now. Is a high-yield savings account worth it in today's economy? Here's what experts had to say about opening this type of savings account in this economy: These accounts offer an opportunity to earn more A high-yield savings account can help you earn considerably more than you would in a traditional savings account. Right now, the average traditional savings account rate is just 0.42%, which doesn't really equate to a meaningful return on your savings. High-yield savings accounts, on the other hand, typically have returns that are many times that. "High-yield savings accounts do what most savings accounts don't: actually earn something, " says Ryan McLin, a CFP with Impact Wealth Group. "With rates often 10x higher than traditional savings accounts, they're ideal for emergency funds and cash reserves." To give you an idea of how much better the earning potential is with a high-yield savings account, imagine you had $10,000 of savings to deposit. In a high-yield savings account with a 4% interest rate, you would earn more than $400 in the first year and more than $2,200 after five years. Meanwhile, you would earn about $211 in interest on $10,000 after five years in a traditional savings account with a 0.42% return. According to McLin, these accounts are well-suited to short-term financial goals, such as the down payment on the home you're planning to buy in the next year or two. They're also the best place to house your emergency fund, thanks to the safety and liquidity they offer. Explore your high-yield savings account options and get started today. High-yield savings account rates remain high for now Interest rates on high-yield savings accounts are variable, so they generally ebb and flow based on the Federal Reserve's federal funds rate and other economic conditions. When the Fed lowers rates, the rates on high-yield savings accounts typically also decline (and vice versa). "After the Fed raised rates and then hit pause, we saw high-yield savings accounts hold steady with some of the best rates we've had in years," says Michael Rodriquez, a certified financial planner with Equanimity Wealth. "Online banks are still competing for deposits, which is keeping rates elevated for now. It's been a rare bright spot in a pretty uncertain economy." Though rates may be a bit lower than they were throughout parts of 2023 and 2024 when the federal funds rate was higher, it's still possible to find high-yield savings account rates of 4% or more currently. Rates on these accounts vary from one bank to the next, though, so it's worth shopping around for one with a competitive return. Of course, there's no guarantee high-yield savings account rates will remain high. If the Fed decreases the federal funds rate, you can expect high-yield savings account rates to dip. But even at their lowest rates, these accounts tend to offer more generous returns than traditional savings accounts. High-yield savings accounts aren't a substitute for investing While high-yield savings accounts are an excellent option for emergency savings and short-term financial goals, they aren't a suitable replacement for investing. "Don't let interest earned in high-yield savings account replace what equity and even bond markets can offer over the long term," says McLin. "This account isn't for growing wealth but making sure accessible cash doesn't lose purchasing power over time." According to the U.S. Securities and Exchange Commission, the stock market has an average historical return of about 10% per year. On the other hand, you'd be lucky to earn 5% in a high-yield savings account. This can make high-yield savings accounts less than ideal for things like your retirement savings, where the goal is growing wealth rather than just preserving it. Your high-yield savings account should also be just one part of your overall financial plan. Generally speaking, you'd turn to stocks and other investments for your retirement and long-term savings and reserve your high-yield savings account for emergency and short-term savings. You may want to consider CDs as an alternative High-yield savings accounts are one option for short-term savings, but they aren't the only option. You may also consider certificates of deposit (CDs). CDs have set terms and fixed interest rates, so you're able to lock in today's high rates for the full CD term. "Short-term CDs, those with maturities of under a year, offer more flexibility, while long-term CDs (one year or longer) typically provide higher interest rates in exchange for less liquidity," says Matt Hicks, VP of Deposit Products at First Tech Federal Credit Union. "However, with the current interest rate environment, consumers can still find short-term certificates with rates equal to or greater than those of their long-term counterparts." Some banks offer more competitive rates on CDs than on high-yield savings accounts, which can make them a solid choice. However, CDs also require you to lock up your funds for the full term. If you do withdraw money early, you will generally face early withdrawal penalties. The bottom line High-yield savings accounts can still be worth it in today's economic climate, especially compared to traditional savings accounts. While rates are a bit lower than they were a year or two ago, high-yield savings accounts remain one of the best tools for your short-term and emergency savings. Just make sure to think of a high-yield savings account as a part of your financial strategy instead of the entirety of it. When combined with other financial tools, though, high-yield savings accounts can help you meet your financial goals and preserve the value of your hard-earned savings.
CBS News
34 minutes ago
- CBS News
4 annuity mistakes seniors should avoid making, according to retirement pros
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. If you're planning to add an annuity to your retirement portfolio, make sure to avoid these big (and costly) mistakes. Getty Images While most Americans are feeling the pinch caused by ongoing economic uncertainties, perhaps no group feels its impact as strongly as seniors, especially those on a fixed budget. Despite easing slightly, inflation is still hovering around 2.4%, according to the Bureau of Labor Statistics. And, prices for food and shelter, in particular, are putting pressure on seniors' budgets and are largely responsible for rates remaining above the Fed's 2% target rate. On top of that, stock market performance has been tenuous at best recently, as evidenced by the S&P 500 dropping nearly 18% earlier this spring. While the index has since bounced back, further turbulence from trade policy uncertainty, global conflicts and other economic factors could potentially impact many seniors' retirement savings. Concerns about retirement security are leading more seniors to take a closer look at annuities. These insurance products offer steady income in retirement, protection against outliving your savings and guaranteed payouts. They can be complex, though, so it's important to understand how they work to avoid some of the common annuity mistakes seniors often make. Start comparing your annuity options online now. 4 annuity mistakes seniors should avoid making, retirement pros say If you're a senior who's planning to open an annuity, make sure you avoid these major mistakes during the process: Not understanding the fees One of the biggest annuity mistakes experts mentioned was not understanding the fine print of an annuity contract, which could lead to unexpected fees and penalties. "Watch out for surrender charges, recurring fees for riders and withdrawal penalties," says Patrick Huey, owner of Victory Independent Planning and creator of the VIP Retirement Glidepath. "If you don't understand how long your money is tied up or what it costs to get it back out, keep asking questions." Given the potential fees you could incur, it's important to avoid signing up for any annuity until you've verified that it helps you achieve your long-term goals. "Make sure you know exactly how this contract fits into your larger financial plan. If it feels like alphabet soup, get a second set of eyes before you commit," Huey says. Find out how to add an annuity to your retirement portfolio today. Choosing the wrong type of annuity An annuity can offer peace of mind in retirement, but you need to make sure it truly fits your situation, experts say. The last thing you want is to end up stuck in a long-term contract that doesn't meet your monthly income needs or match your risk tolerance level. So how can you make sure you're getting the right type of annuity? "The decision will be different depending on your goals," said Melissa Caro, CFP and founder of My Retirement Network in New York. "If you need guaranteed income now, an immediate annuity works best. For growth with some downside protection, consider indexed annuities. Fixed annuities suit those wanting predictable, conservative growth." To avoid this mistake, make sure you're very clear on your goals for income, death benefit and liquidity before buying the annuity, says David Haas, president of Cereus Financial Advisors. "I also think a CFP who views annuities as tools instead of products can help the senior find the best solution to the problems they are trying to solve," says Haas. Not designating a beneficiary Failing to name a beneficiary can prevent your annuity benefits from passing on to a loved one. For example, if you die 10 years into a 20-year annuity, your spouse or beneficiary might receive payments for the remaining 10 years if the contract allows for it. But that only works if you've properly named them as a beneficiary in the contract. It's important to note, there are various death benefit options you could choose from but they rely on a clear beneficiary designation to avoid serious consequences. "Without proper beneficiary designations, annuity proceeds go through probate," says Caro. "For married couples, not naming a spouse as beneficiary can result in loss of valuable spousal continuation rights, where the surviving spouse can take over the contract and maintain its tax-deferred status." Withdrawing excessive funds Another annuity mistake seniors often make is taking out too much money early on. Remember, annuities are designed for long-term retirement income, so taking out too much money early can trigger fees and penalties. It could also reduce your future income, lower your death benefit and make your retirement less secure. "Annuities are not piggy banks, they are more like hourglasses. They work properly when you take the amount out they are designed for. If you take larger withdrawals, the annuity will fail to do what it was designed for. Withdrawals above the guaranteed amount will reduce the guarantee," Haas says. The bottom line If you're thinking about an annuity, take your time and compare multiple providers. Look at the different features, fees and how the payouts work. Just as important, make sure the company is financially strong. Before investing in an annuity, you should also be sure to understand what you're agreeing to. The contract should make sense to you and match your goals for retirement income. "After two decades working with retirees and navigating the annuity maze, I've learned one thing: no two plans, or people, are alike," says Huey. "The products themselves aren't inherently good or bad, it's how and why you use them that counts. If I could pass on one thing to seniors considering annuities, it would be this: slow down, ask more questions, and make sure every piece of the puzzle makes sense in your broader plan."
New York Times
an hour ago
- New York Times
Trump Administration Live Updates: U.S. to Examine Social Media Posts of Student Visa Applicants
A Norwegian naval commando hoisted himself onto the deck of a ship during a NATO exercise in March. Beyond projecting military strength and pledging unity, a more pressing theme has emerged for next week's NATO summit: Keep President Trump happy. As leaders prepare to meet for the annual forum starting on Tuesday, U.S. allies have watered down their public support for Ukrainian membership and drafted a policy communiqué as short as five paragraphs to keep the American leader on board. The meeting itself, in The Hague, will open and close in under two days — a timeline designed to keep it devoid of drama. 'No one wants to say no to Trump,' said Mujtaba Rahman, who analyzes Europe for the Eurasia Group. Asked on Wednesday whether the Iran-Israel war would prompt him to skip the meeting, Mr. Trump told reporters that he still planned to attend. In any case, his influence is certain to loom over the gathering. It has already driven an effort by NATO's secretary general, Mark Rutte, to increase military spending by each of the alliance's 32 members to meet a figure suggested by Mr. Trump. He has demanded it be raised to 5 percent of each country's gross domestic product, up from the current level of 2 percent. Mr. Rutte has proposed widening the definition of military spending to help meet that objective. The new benchmark would include 3.5 percent of G.D.P. on core defense spending — weapons, capabilities, troops — and the rest on what NATO calls 'defense and security-related investment, including in infrastructure and resilience.' In the weeks since Mr. Rutte's idea gained steam, its details, and shortcomings, have become clearer, according to officials and experts. The timeline to increase spending may be different for everyone, and officials are confused about the requirements. Even if countries do allocate the sums, European and even American defense industries may not be able to absorb the money or deliver in a timely fashion. And while NATO countries generally agree it is past time to spend more on security in Europe, where officials believe a militarized Russia might be tempted to test the alliance within years, some nations already struggle to reach the existing target on military spending. They are unlikely to meet Mr. Trump's demand soon, if ever. The discussion about Mr. Rutte's proposal, experts said, has devolved into a debate over spending billions of dollars to fund an ever-widening range of priorities. 'It is largely a shell game,' said Jeremy Shapiro, a former State Department official and now research director of the European Council on Foreign Relations. 'There is some reality there, because defense spending is increasing across Europe, but more because of Vladimir Putin than Donald Trump.' Image President Trump, at the White House on Wednesday, has demanded an increase in military spending by NATO's members. Credit... Doug Mills/The New York Times A NATO Numbers Game Mr. Trump first demanded the 5 percent figure two weeks before his inauguration, although his ambassador to NATO, Matthew G. Whitaker, insisted recently that the United States was not 'driving the timeline' for allies to spend more on defense. 'The threats are driving the timeline,' he said. 'Europe keeps telling us that Russia is their biggest threat and we agree, in the Euro-Atlantic it is. And so we need to make sure everybody's investing.' Initially, Mr. Trump's ambitions seemed both abstract and implausible: Only 23 NATO members were meeting their spending goals by the end of last year. But Mr. Rutte's proposal allows for some spending on what NATO calls 'military-adjacent' projects. In practical terms, that could include investments in advanced technology; rebuilding roads, bridges and other infrastructure; civic defense; education; improved health services; and aid to Ukraine. In effect, the Trump benchmark 'is both real and not real,' said Nathalie Tocci, director of Italy's Institute of International Affairs. 'The real thing is 3.5 percent, which has nothing to do with Trump and everything to do with NATO's getting what it judges it needs,' she said. 'The unreal part is the 1.5 percent, the P.R. move for Trump,' she said. 'Of course infrastructure is important, and diplomacy and education, so lump it all together for Trump. And if the magic figure of 5 percent ensures benign indifference rather than malign hostility, that's all to the good.' Image Ukrainian soldiers last month in the Donetsk region. Credit... Tyler Hicks/The New York Times Counting Aid to Ukraine The proposal may have helped Mr. Rutte balance the president's desires with those of European leaders, but it has also created complications. Defense ministers meeting at NATO headquarters in Brussels this month appeared confused over how the money should be spent, and how soon, and over whether aid to Ukraine could count. 'We have to find a realistic compromise between what is necessary and what is possible, really, to spend,' said Germany's defense minister, Boris Pistorius. Luxembourg's defense minister, Yuriko Backes, was more blunt. 'It will be the capabilities that will keep us safe, not percentages,' she said. 'This is what should be driving our investments, not the other way around.' Luxembourg will reach the current spending threshold — which was set in 2014 to be accomplished in a decade — only this year. And not until recently was it clear — even among some NATO defense ministers — that countries could include a small fraction of their military contributions to the war in Ukraine as part of their defense spending. But the rules for what qualifies are complex and decided at NATO headquarters on a case-by-case basis, to ensure that countries don't double-count what they give to Ukraine as a part of domestic military investment. 'Supporting Ukraine is really an investment into our own security,' said Sweden's defense minister, Pal Jonson. Allies are debating how to count the aid to Ukraine. The current plan is to consider it core military spending. But some of the countries nearest to Russia's borders do not want to dilute their domestic defense and want aid to Ukraine categorized as 'related investments.' Image Mark Rutte, the NATO secretary general, during a visit to the White House in April. Mr. Rutte is the architect of a plan that would allow for some spending on what the alliance calls 'military-adjacent' projects. Credit... Haiyun Jiang for The New York Times A Matter of Time There is also uncertainty about when allies would be expected to meet the higher spending threshold. Mr. Rutte initially proposed 2032, but countries on NATO's eastern flank want it to happen sooner. NATO intelligence suggests that, without a credible military deterrent, Russia could mount an effective offensive against the alliance in five years after the Ukraine war ends. 'We don't have time even for seven years,' Defense Minister Hanno Pevkur of Estonia said recently. 'We have to show that we have everything we need to defend our countries.' Britain, for example, has committed to spending only 3 percent by 2034, long after Mr. Trump is scheduled to leave office. Canada, Italy, Luxembourg and Spain will reach 2 percent, a decade-old goal, only this year. And the United States itself currently spends about 3.4 percent of its G.D.P. on defense, even though in sheer dollars it accounts for nearly half of NATO spending. The amount that Washington spends just on Europe is a much smaller percentage of the Pentagon's $997 billion budget. Like Mr. Rutte, other world leaders have sought ways to get the most out of their dealings with Mr. Trump and avoid unpredictable problems. At this week's Group of 7 summit, the newly elected prime minister of Canada and host of the event, Mark Carney, deployed a mix of flattery and discipline. Yet the president still disrupted the gathering, departing early to address the Iran-Israel war. Mr. Rutte hopes to avoid such an outcome. 'Trump is making a fake demand for more spending, and they're giving him a fake response,' Mr. Shapiro said. He called the Rutte plan 'clever, because it lets Trump get what he wants and he can brag about it.'
