SNB Holds Rates at 0.00% as Inflation Forecasts Edge Lower
Key Takeaways (Neutral to Dovish Tilt):
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Policy rate unchanged at 0.00%, with the SNB reiterating readiness to intervene in FX markets when necessary.
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Inflation forecasts trimmed across 2026–2027, reinforcing subdued price pressures and a low-inflation environment.
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Economic outlook improves slightly, supported by lower U.S. The SNB noted that inflation pressures remain virtually unchanged, but its updated forecasts show slightly lower inflation over the next several years—0.2% in 2025, 0.3% in 2026, and 0.6% in 2027—highlighting a persistently subdued price environment. Growth projections were modestly upgraded, with 2025 GDP now seen at 1.5% and 2026 GDP around 1.0%, reflecting the positive economic impact of lower U.S. tariffs on Swiss goods and somewhat stronger global activity.
Even with these improvements, the SNB emphasized that the main risk to Switzerland’s outlook remains the global economy, particularly uncertainties surrounding U.S. trade policy. The Bank observed that global growth has been more resilient than previously assumed but warned that tariffs could still weigh more heavily on momentum ahead. The SNB reiterated its willingness to intervene in the foreign exchange market if needed to maintain appropriate monetary conditions. He reiterated that the current stance is appropriate and continues to support both price stability and economic growth.
Schlegel noted that low interest rates remain effective largely through the exchange rate channel, and the Bank stands ready to intervene in FX markets if needed. Although the SNB downplayed recent softer inflation readings, it emphasized that risks remain elevated, including U.S. tariff policy. At the same time, uncertainty has “slightly declined,” and the global economy is expected to grow moderately.
Importantly, the SNB repeated that while the threshold for returning to negative interest rates is much higher than in the past, the tool remains available should deflationary forces return. The recent U.S. reduction in tariffs on Swiss goods was acknowledged as supportive, but not policy-changing.
Overall, the message reinforces that the SNB is comfortable staying on the dovish side of neutral, preferring to maintain accommodative conditions and relying on FX management rather than rate hikes to guide inflation back through its target zone.
USDCHF Technical Analysis: SNB’s Dovish Tone and FX Intervention Warning Fuel Sharp CHF Strength
Although the SNB’s policy statement leaned neutral to dovish, with inflation forecasts trimmed for 2026 and 2027, Chairman Schlegel’s reluctance to even discuss a return to negative interest rates gave the Swiss franc a subtle tailwind. More importantly, the SNB repeated its willingness to intervene in the foreign exchange market when necessary — a reminder that tends to spook USDCHF buyers and discourage aggressive CHF selling.
The reaction in USDCHF was immediate and decisive. The pair has dropped –0.65%, making it the biggest USD mover of the session. The decline accelerated after price action failed on a move higher and against the 50% retracement of the entire trading range since the November high at 0.8000, with the session peak stalling at 0.8001 before sellers seized control
USDCHF Technical Analysis: Pair Plunges After Failing at Key 0.8000 Resistance
