Heteronomics Archive

June 19, 2025

SNB: 25bp Rate Cut To 0.0% (Consensus 0.0%) in Jun-25

The SNB lowered its policy rate to 0% as expected, responding to declining inflation and subdued price pressures, with the latest forecasts indicating inflation will remain well within the price stability range through 2027.
The SNB’s guidance remains cautious, highlighting global trade tensions, external risks, and persistent uncertainties as key factors shaping the interest rate outlook.
Future policy decisions will be data-driven, with the SNB prepared to adjust rates further or intervene in currency markets if inflation deviates from target or if external shocks intensify.

March 20, 2025

The SNB lowered its policy rate by 25bps to 0.25%, in line with expectations, citing low inflation and downside risks to price stability. Inflation is projected to remain within the central bank’s target range, reducing the need for aggressive monetary easing.
Switzerland’s economy remains resilient, with solid Q4 2024 growth, but global uncertainties—including geopolitical tensions and trade risks—could pose challenges. Domestic demand is expected to benefit from rising real wages, while weak foreign trade may dampen overall growth.
Future policy decisions will be data-dependent, with the SNB closely monitoring inflation and external conditions. While further easing is possible, ongoing global inflationary pressures and fiscal stimulus in Europe could influence the central bank’s stance.

December 12, 2024

The SNB cut its policy rate by 50 basis points to 0.5%, surprising consensus expectations for a lesser reduction because of lower-than-expected inflation and subdued economic conditions.
Inflation projections remain well within the price stability range, with medium-term forecasts reflecting subdued second-round effects, though heightened global and domestic uncertainties may influence future rate decisions.
The SNB is flexibly prepared to keep easing if inflationary pressures weaken further while maintaining readiness to intervene in foreign exchange markets to manage franc appreciation.

September 26, 2024

The SNB cut its policy rate to 1.0%, matching the consensus, reflecting reduced inflationary pressures mainly due to franc appreciation and energy price reductions.
Inflation forecasts have been lowered, with the SNB projecting 1.2% for 2024 and 0.6% for 2025, suggesting further rate cuts may be necessary to maintain price stability.
While domestic growth remains solid, risks from the global economy, currency appreciation, and geopolitical tensions continue to weigh on the medium-term outlook.