Swiss central bankers have left their benchmark interest rate unchanged, as expected, and the latest data and comments suggest no shifts to borrowing costs in the months ahead. But observers will be receiving more information about decision-making, with officials announcing plans to begin publishing accounts of their rate decision meetings starting in four weeks.
The Swiss National Bank said Thursday that it would hold its policy rate at zero percent, a level set in June. Most economists had predicted the decision.
The rate hold followed six straight reductions that included cuts of 25 basis points in June and March, and 50bp in December.
The bank’s newest projections for annual inflation, which were unchanged from June, suggest officials should be able to maintain the status quo for quite a while. The SNB’s inflation corridor of 0-2% is wide enough for the coming months and the next two years, according to this week’s forecasts. They showed consumer price growth at 0.2% this year, 0.5% in 2026, and 0.7% in 2027.
“Inflationary pressure has barely changed compared to June,” the bank said. “While inflation is likely to be slightly higher in the short term, in the medium term the conditional inflation forecast remains unchanged.”
When pressed about taking rates below zero, SNB Chairman Martin Schlegel told journalists at Thursday’s press conference: “Yes, we are prepared to cut further if required.” He then reiterated that the bar for such a reduction is higher than one for rate cuts in positive territory.
Additionally, Schlegel classified current monetary policy as “expansive”.
Trading data suggested changes in Swiss rates are unlikely anytime soon, with the swap market pointing to holds through at least mid-2026.
With its focus on inflation, the SNB is even ready to let price growth drift below its corridor, Schlegel said. “We can have negative inflation prints in the short term, but we need price stability in the medium term.”
US tariffs to hit growth
Now that consumer prices are apparently under control, concerns about economic growth have come to the fore. Washington has slapped a 39% fee on imports of Swiss goods. “The economic outlook for Switzerland has deteriorated due to significantly higher US tariffs. The tariffs are likely to dampen exports and investment especially.”
The bank cut its GDP growth outlook for next year to just under 1% from the June forecast of 1.0-1.5%.
The release of the SNB growth projections came a day after the KOF Institute at the ETF Zurich university cut its headline, sports-adjusted GDP forecast for next year to 0.9% from 1.5%
Schlegel called the levies a “major challenge” for Swiss firms but then admitted that the pressure was not on all companies, with the service sector not directly affected. “The impact on the economy as a whole is limited,” he noted, adding that only 4% of Swiss exports are sent to the US.
Charlotte de Montbellier, an analyst at ING, wrote: “At this stage, it’s clear the SNB would prefer to avoid returning to negative rates, and we do not expect further rate cuts. However, the door to future easing remains ajar. A sharper-than-expected deterioration in the economic outlook could quickly bring rate cuts back into the conversation.”
Smooth sailing for the franc?
With the SNB no longer calling the franc “highly valued”, the likelihood of intervention on currency markets has likely waned. Schlegel admitted that the EUR/CHF pair has been little changed, but he did note that the franc has gained significant ground against the dollar.
Chris Turner at ING noted that the SNB’s change in language about the value of the franc and the possibility of intervention “may well be down to the realpolitik of a more interventionist US administration wary of trading partners limiting currency strength for trade gain.”
CHF/EUR is up 0.4% this year; CHF/USD has surged 14% since 1 January.
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- Trump tariffs to hurt Swiss economy
- Bank ready to act on FX markets
- Traders see no cuts over next nine months
- Minutes of meetings to be published
By Eric Culp, European Editor
LiveSquawk News
@eculp.bsky.social
@EricCulpLS
25 September 2025 | 10:10 GMT
Swiss central bankers have left their benchmark interest rate unchanged, as expected, and the latest data and comments suggest no shifts to borrowing costs in the months ahead. But observers will be receiving more information about decision-making, with officials announcing plans to begin publishing accounts of their rate decision meetings starting in four weeks.
The Swiss National Bank said Thursday that it would hold its policy rate at zero percent, a level set in June. Most economists had predicted the decision.
The rate hold followed six straight reductions that included cuts of 25 basis points in June and March, and 50bp in December.
The bank’s newest projections for annual inflation, which were unchanged from June, suggest officials should be able to maintain the status quo for quite a while. The SNB’s inflation corridor of 0-2% is wide enough for the coming months and the next two years, according to this week’s forecasts. They showed consumer price growth at 0.2% this year, 0.5% in 2026, and 0.7% in 2027.
“Inflationary pressure has barely changed compared to June,” the bank said. “While inflation is likely to be slightly higher in the short term, in the medium term the conditional inflation forecast remains unchanged.”
When pressed about taking rates below zero, SNB Chairman Martin Schlegel told journalists at Thursday’s press conference: “Yes, we are prepared to cut further if required.” He then reiterated that the bar for such a reduction is higher than one for rate cuts in positive territory.
Additionally, Schlegel classified current monetary policy as “expansive”.
Trading data suggested changes in Swiss rates are unlikely anytime soon, with the swap market pointing to holds through at least mid-2026.
With its focus on inflation, the SNB is even ready to let price growth drift below its corridor, Schlegel said. “We can have negative inflation prints in the short term, but we need price stability in the medium term.”
US tariffs to hit growth
Now that consumer prices are apparently under control, concerns about economic growth have come to the fore. Washington has slapped a 39% fee on imports of Swiss goods. “The economic outlook for Switzerland has deteriorated due to significantly higher US tariffs. The tariffs are likely to dampen exports and investment especially.”
The bank cut its GDP growth outlook for next year to just under 1% from the June forecast of 1.0-1.5%.
The release of the SNB growth projections came a day after the KOF Institute at the ETF Zurich university cut its headline, sports-adjusted GDP forecast for next year to 0.9% from 1.5%
Schlegel called the levies a “major challenge” for Swiss firms but then admitted that the pressure was not on all companies, with the service sector not directly affected. “The impact on the economy as a whole is limited,” he noted, adding that only 4% of Swiss exports are sent to the US.
Charlotte de Montbellier, an analyst at ING, wrote: “At this stage, it’s clear the SNB would prefer to avoid returning to negative rates, and we do not expect further rate cuts. However, the door to future easing remains ajar. A sharper-than-expected deterioration in the economic outlook could quickly bring rate cuts back into the conversation.”
Smooth sailing for the franc?
With the SNB no longer calling the franc “highly valued”, the likelihood of intervention on currency markets has likely waned. Schlegel admitted that the EUR/CHF pair has been little changed, but he did note that the franc has gained significant ground against the dollar.
Chris Turner at ING noted that the SNB’s change in language about the value of the franc and the possibility of intervention “may well be down to the realpolitik of a more interventionist US administration wary of trading partners limiting currency strength for trade gain.”
CHF/EUR is up 0.4% this year; CHF/USD has surged 14% since 1 January.
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