Swiss National Bank Cuts Rates Further Amid Cooling Inflation

The Swiss National Bank reduced interest rates by 25 basis points, aligning with the ECB and Fed's actions. This marks the third rate cut this year as inflation cools to within the target range. SNB indicates readiness for further cuts, signaling more to come in the wake of a strengthening Swiss franc.

The Swiss National Bank (SNB) trimmed interest rates by 25 basis points on Thursday, reflecting similar recent moves by the European Central Bank and U.S. Federal Reserve, and signaling the possibility of further reductions as inflation plummets. The policy rate now stands at 1.00%, the lowest since early 2023, following analysts' forecasts.

This decision, the last under SNB Chairman Thomas Jordan who completes a 12-year tenure, came as inflation in Switzerland decelerated to 1.1% in August, staying within the central bank's target range of 0-2% for 15 months. Jordan affirmed the SNB's readiness for additional cuts, underscoring reduced inflationary pressure.

'Further cuts in the SNB policy rate may become necessary in the coming quarters to ensure price stability over the medium term,' Jordan stated in prepared remarks post-decision. The SNB revised its inflation forecasts for 2025 and 2026 downward and anticipated 0.6% consumer price growth in Q2 2027.

(With inputs from agencies.)