SNB policymaker Tschudin says medium-term inflation pressures are unchanged
- Medium-term inflation pressures are unchanged
- Ready to intervene in the FX market if necessary
- Full report here
SNB policymaker Petra Tschudin published a report on global economic developments and monetary policy in Switzerland. She noted that the inflation outlook remains broadly under control despite recent energy-driven price pressures. Tschudin said medium-term inflation pressures are unchanged, reinforcing the SNB’s view that the recent pickup in inflation is largely a short-term phenomenon rather than the start of a sustained inflation problem.
As a reminder, the SNB left the policy rate unchanged at 0.00% while slightly raising their near-term inflation forecasts following higher global energy prices. The central bank now expects inflation to average 0.6% in 2026 and 2027, with 2028 inflation at 0.7%, all comfortably within the SNB’s price stability range of 0–2%. Despite the upward revision, the bank stressed that underlying inflation dynamics have remained largely stable.
The highlight of the decision was the softening in wording around FX intervention. In the March statement, they said “SNB’s willingness to intervene in the foreign exchange market has increased" but in June they added “if necessary".
The franc continues to attract safe-haven demand during periods of geopolitical stress. Excessive appreciations risk tightening financial conditions by lowering import prices too aggressively and weakening Swiss export competitiveness. For the SNB, a sharply stronger franc could push inflation back toward deflation and they want to avoid that.
Recent Swiss data supports the SNB’s wait-and-see approach. Inflation has risen modestly from near-zero earlier this year, mainly due to imported energy costs, but domestic price pressures remain subdued. Meanwhile, Swiss economic growth is expected to remain modest at around 1.0% in 2026, with stronger momentum only gradually emerging in 2027. That combination of low inflation and moderate growth gives the SNB room to remain patient.
This article was written by Giuseppe Dellamotta at investinglive.com.