- Swiss National Bank keeps policy rate at 0%, despite recent drop in inflation. Lower inflation forecasts for 2026 and 2027. More likely to intervene in forex market than lower rates further.
- Inflation in Switzerland fell by 0.2% in November, bringing annual rate to 0%. Factors like lower hotel prices and rent contributed to decline. Medium-term inflation pressure remains stable.
- SNB forecasts inflation of 0.2% for 2025, 0.3% for 2026, and 0.6% for 2027. Expects inflation between 0.7% and 0.8% in first three quarters of 2028. Policy rate to remain at 0% through mid-2028.
- SNB not expected to cut rates into negative territory. Forecasting first rate hike in second half of 2027. Prepared for prolonged low inflation. Likely to use forex market interventions.
- Swiss economic outlook improving slightly with lower US tariffs. SNB predicts GDP growth just under 1.5% for 2025 and around 1% for 2026. Unemployment expected to rise somewhat.
- Swiss GDP contracted in Q3 of 2025 due to decline in pharmaceutical industry. Rise in unemployment in recent months. Global economic development poses main risk to Switzerland’s economy.
Read more at Morningstar: Swiss National Bank Holds Interest Rates Despite Recent Fall in Inflation