(Bloomberg) — The Swiss National Bank’s most recent half-point interest-rate hike still only slows inflation to 2% in its forecasts, Governing Board member Andrea Maechler said, suggesting more tightening may be needed.
(Bloomberg) — The Swiss National Bank’s most recent half-point interest-rate hike still only slows inflation to 2% in its forecasts, Governing Board member Andrea Maechler said, suggesting more tightening may be needed.
“We use the conditional inflation forecast as an important communication tool,” Maechler said on Wednesday in Rueschlikon near Zurich. “Even with our last 50 basis-point step, we only get down to exactly 2%.”
Since that’s just the ceiling targeted by the SNB, it signals that another increase might be needed at the next quarterly meeting on June 22 to bring inflation fully under control.
Switzerland’s central bank has lifted rates by 225 basis points since last June. While the SNB kicked off its tightening cycle earlier that the European Central Bank, its schedule of just one meeting a quarter means it has raised borrowing costs by less than its euro-area counterpart.
Economists currently expect just one more quarter-point hike, which would bring the policy rate to 1.75%.
With prices in March being 2.9% higher than the year before — down from a 3.5% peak — inflation in Switzerland is lower than in any other developed economy. Still, the SNB sees consumer-price growth staying at 2% or higher through 2025, at the upper edge of the central bank’s desired level.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.