- Prior 0.00%
- Our willingness to intervene in the FX market has increased due to the Middle East crisis
- SNB to counter rapid and excessive appreciation of the Swiss franc, which could jeopardise price stability
- Economic outlook for Switzerland for the coming months is uncertain
- Main risk to the Swiss economy is the development of the global economy
- In particular, how the situation in the Middle East could curb global economic activity
- In addition to the Middle East situation, trade policy outlook also remains uncertain
- Anticipates that the increase in energy prices will raise inflation in many countries in the short-term
- Sees 2026 inflation at 0.5% (previously 0.3%)
- Sees 2027 inflation at 0.5% (previously 0.6%)
- Sees 2028 inflation at 0.6%
- Sees 2026 GDP at around 1% (no change)
- Sees 2027 GDP at around 1.5%
- Full statement
There are no surprises by the SNB as they held rates steady today. The central bank is also not beating around the bush here and is getting straight to the point, stepping up their language on currency intervention. That might draw some flak, particularly from the US, but I’m guessing Trump and his lackeys have bigger things to worry about at the moment.
Given that they are unwilling to take a step back to unconventional monetary policy territory, the only play that they have right now is to intervene in the currency market. And they are making that rather clear, with perhaps the line still being drawn at 0.90 for EUR/CHF.
Other than that, there is a slight bump to their inflation outlook for this year. So if anything, it hints that their appetite for dipping into negative rates is still some distance away.
All else being equal, this will be a copy and paste for the Q2 playbook as well. So, don’t expect too much surprises from the SNB during this period.
