Economic Outlook:
• An economic slowdown in Switzerland cannot be ruled out.
• Growth expectations have been revised downward recently.
• The SNB is closely monitoring developments and will adjust monetary policy if necessary.
Uncertainty and Global Context:
• High uncertainty due to current trade policy tensions and global fragmentation.
• Events like Russia’s invasion of Ukraine and COVID-19 have highlighted risks to global economic integration.
• Protectionism poses a particular challenge for Switzerland as a small open economy.
Mandate and Monetary Policy:
• The SNB’s primary mandate is to ensure price stability, while considering economic developments.
• Price stability is defined as inflation between 0% and 2%.
• It is crucial for economic planning, investment, social cohesion, and political stability.
Recent Policy Actions:
• The SNB acted early to combat post-pandemic inflation by raising interest rates and selling foreign currency.
• As inflationary pressure decreased, the SNB lowered the policy rate in steps.
• In March, the SNB cut the policy rate by 0.25% to 0.25%, citing weak inflation and downside risks.
• The SNB remains ready to intervene in the foreign exchange market if necessary.
Strategic Approach:
• The SNB follows a risk management approach, considering multiple scenarios.
• Emphasized the importance of timely and decisive action in monetary policy to avoid second-round inflation effects.
• Compares the SNB to a ship steering through storms — needing constant course correction but always aiming at price stability.