In its so-called summary of monetary discussions, the Swiss National Bank (SNB) states that its zero-interest-rate policy is already having an expansionary effect and could lead to higher inflation in the months ahead.

The SNB’s officials shared, “The full impact of the monetary policy easing in past quarters will only take effect with a lag. In light of the weak inflationary pressure and the slight deterioration in the economic outlook, the bank’s expansionary monetary policy is contributing to a rise in inflation.”

Swiss National Bank Chairman Martin Schlegel says the state’s inflation is likely to rise slightly in the coming quarters, with economic indicators pointing to a stable situation with moderate growth. According to slides prepared for an SNB event in Belp, central Switzerland, Schlegel said uncertainty remains high. He noted that with the announced but currently suspended US tariffs on certain pharmaceutical products, the downside risks could rise.

SNB believes the effect of US tariffs is manageable

At their last meeting, on September 25, officials at the SNB opted to maintain interest rates, believing the current policy is strong enough to boost inflation in the months ahead.

The central bank explained that its September decision to stop cutting rates and maintain zero borrowing costs reflected a view that US tariffs on Switzerland were not overly disruptive. Despite relatively high levels of uncertainty, policymakers noted that the country’s economy was showing moderate growth.

Gero Jung, head of investment strategy at Banque Cantonale du Valais, noted that the need for potential further monetary easing was judged as not being “appropriate” at the current juncture. He continued to say that in the absence of major shocks, the current status quo of a zero policy rate remains the most likely scenario.

Alexandro Bee, an economist at UBS in Zurich, noted that they saw little new information in the paper but did find a few points of interest. He pointed to the lack of alternative scenarios — for example, one in which negative interest rates were implemented — as particularly telling. The SNB probably also avoided delivering any surprises in the summary, which is why it had fewer details than minutes published by other central banks, Bee said.

Since the US announced the tariffs, SNB officials have appeared to downplay concerns about the 39% rate, which is significantly higher than the rates faced by other countries. However, analysts have started revising their forecasts. The government even lowered its growth estimate for 2026 from 1.2% to 0.9%, citing the import levies.

According to reports, inflation rose to 0.2% in September, but officials anticipate a moderate increase soon.

Swiss government will release summary after interest rate decision

The summary the bank released is the first of its kind, following Schlegel’s push for greater transparency, similar to that of other advanced economies, such as the US. According to the Swiss government, such a summary will be unveiled four weeks following each interest-rate decision. 

Analysts have also noted that the measure provides the central bank with a new avenue to influence markets amid ongoing efforts to slow franc inflows, even as the currency approaches its strongest point against the euro in ten years. 

On the other hand, some UBS economists hinted on Wednesday that the Swiss National Bank is likely stepping in to curb the franc’s appreciation. In their summary, policymakers, however, made only brief remarks on the franc.

They commented, “Geopolitical shocks could lead to money flowing into currency areas regarded as safe havens by investors. This could result in an appreciation of the Swiss franc. This risk is currently being countered somewhat by the relatively high interest-rate differential.”

Nonetheless, the Swiss government had clarified earlier that it is not the aim of this summary to inform about individual members’ opinions and considerations, adding that it will attempt to summarize only “the most important elements” of discussions in the governing board to make them comprehensible to everyone. Unlike their counterparts, Schlegel said they will not share all information.

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