The SNB is positive about US tariff developments
Keystone / Peter Klaunzer
The Swiss National Bank (SNB) has left its key interest rate unchanged at zero percent. This level is unlikely to change significantly in the foreseeable future.
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According to the SNB, the current key interest rate supports economic growth, meaning it is expansionary. At the same time, it helps to keep inflation within the range of price stability. Price stability, according to the SNB, means inflation of 0 to 2%.
The latest figures fall just short of the Swiss National Bank’s (SNB) definition of “price stability.” In November, annual inflation in Switzerland fell back to zero.
The SNB acknowledged ahead of its quarterly press conference that inflation had been slightly lower than expected in recent months. However, it maintained that inflationary pressure in the medium term remains virtually unchanged compared to its last assessment.
“Our monetary policy is contributing to inflation likely rising slowly in the coming quarters,” said SNB President Martin Schlegel at the event.
Nevertheless, the SNB has slightly lowered its inflation forecasts for 2026 and 2027. Specifically, the central bank now expects average inflation of 0.3 and 0.6% over the next two years. In September, the forecast had been 0.5 and 0.7%. The forecast of 0.2% for the current year, 2025, was confirmed.
This means the SNB’s inflation forecast remains above zero, which, according to economists, argues against the imminent introduction of negative interest rates. Most economists expect the SNB’s key interest rate to remain at zero throughout 2026. Interest rate hikes are not anticipated until the beginning of 2027.
In its brief communiqué, the SNB also addressed the agreement reached the previous day in the tariff dispute with the US: With the lower US tariffs and a somewhat improved international outlook, the economic prospects for Switzerland have brightened slightly.
However, the central bank cautions that the main risk for the domestic economy remains the development of the global economy. Overall, the SNB forecasts Swiss GDP growth of just under 1.5% for 2025 and around 1% for 2026. In this environment, unemployment is likely to increase somewhat.
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Translated from German by DeepL/mga
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