The Swiss National Bank (SNB) expects inflation to gradually revive, according to the minutes from its latest rate-setting meeting. This outlook supports the central bank’s decision to maintain its current monetary policy, avoiding both interest rate cuts and hikes. The SNB left its policy rate unchanged at 0% on December 11, maintaining its position as having the lowest interest rate among major global central banks.
The SNB forecasts inflation to average 0.3% in 2026 and 0.6% in 2027. Recent data from the Federal Statistics Office showed a slight increase in prices of 0.1% in December. The SNB’s minutes indicated that while inflation has recently declined, it is expected to increase over the forecast period, remaining within the 0-2% target range consistent with price stability. The Governing Board determined that the current monetary conditions are appropriate, making neither increasing nor decreasing interest rates a suitable option.
Karsten Junius, an economist at J.Safra Sarasin, interpreted the minutes as evidence of the SNB’s neutral stance on interest rate direction. Junius anticipates no changes to interest rates for the next 18 months. The SNB also acknowledged a slight improvement in the economic outlook due to a reduction in U.S. tariffs on Swiss goods, decreasing them from 39% to 15%.
The Swiss National Bank is the central bank of Switzerland, responsible for the nation’s monetary policy and the issuance of Swiss franc banknotes. It aims to ensure price stability while considering the economic outlook. This is only the second time the central bank has released the minutes of its decision-making process, following its first publication in October.
