Swiss National Bank an outlier in holding rates and saying inflation under control
TLT•The Swiss National Bank kept its benchmark interest rate at 0% and said inflation remained within its price-stability range. It expects inflation to average 1.2% in the fourth quarter and first quarter of 2027, then 0.8% for 2027.
1. Rates held at zero
The Swiss National Bank kept its policy rate at 0%, saying inflation driven by the Middle East war was not a threat to Swiss price stability. Chairman Martin Schlegel said inflation was 0.8% and that medium-term inflationary pressure had increased only slightly compared with June. The bank expects inflation to rise somewhat in the fourth quarter before declining during 2027.
2. Forecasts and currency policy
The SNB now expects inflation to average 1.2% in the fourth quarter and first quarter of 2027, then 0.8% in 2027, up 0.2 percentage points from its June forecast. It said it would remain willing to intervene in foreign exchange markets as necessary, changing its previous wording about an increased willingness to curb the franc’s rise. After the decision, the franc weakened against the dollar and euro.
3. Growth outlook improves
The SNB forecast Swiss economic growth of 1.5% to 2% this year, stronger than previously expected, following robust second-quarter performance. Schlegel said the bank would assess incoming data before its next decision in December.
