Swiss National Bank holds rates as expected, sees inflation largely contained
TLT•The Swiss National Bank kept its policy rate at 0% and said inflation is likely to rise in late 2026 before easing in 2027. It forecasts average inflation of 0.8% in 2027 and economic growth of 1.5% to 2% this year.
1. Rate held at zero
The Swiss National Bank kept its policy rate at 0%, as economists and markets had expected, and said medium-term inflationary pressure had increased only slightly. It also changed its wording on foreign exchange intervention, saying it was willing to be active in the market as necessary to ensure appropriate monetary conditions.
2. Inflation and growth forecasts
The SNB expects inflation to average 1.2% in the fourth quarter of this year and the first quarter of 2027, before easing. It now forecasts average inflation of 0.8% in 2027, 0.2 percentage points above its June forecast, and economic growth of 1.5% to 2% this year.
3. Market reaction
The franc weakened after the decision, while yields on two-year Swiss government debt fell nearly 4 basis points to 0.3313%. Swiss inflation reached 0.8% in August, within the SNB's 0% to 2% target range.
