SNB boss Jordan isn’t ruling out his next interest rate hammer

In Switzerland, the short-term economic outlook was also overshadowed. As in other countries, the level of uncertainty is high. However, as SNB Chairman Thomas Jordan (59) explained in his annual meeting with the Federal Council, the Swiss National Bank (SNB) does not exclude the possibility of further rate hikes even after two rate hikes.

In an international comparison, inflation in Switzerland is low, but above the range the SNB equates to price stability, according to the Swiss government’s meeting with Jordan on Wednesday.

Not just the pandemic and Ukraine

There were growing signs that price increases would increasingly spill over into goods and services that were not directly affected by the war in Ukraine or the consequences of the pandemic. Against this background, the SNB raised its key interest rate in June and, in another positive step, to 0.5 percent in September, says the Federal Council.

In addition, the SNB had allowed the franc to appreciate in nominal terms since December 2021 to reduce inflationary pressure. SNB Chairman Thomas Jordan said in a statement that tighter monetary policy is needed to counter increasing inflationary pressure and make it harder for goods and services to spread to goods and services that have hitherto been less affected by inflation.

«Ensure price stability»

It cannot be ignored that further rate hikes will be necessary to ensure price stability in the medium term. In addition, SNB Chairman Jordan explained the situation in the Swiss real estate and mortgage markets. According to the Federal Council, another topic of discussion was the expectations regarding the profit distribution of the SNB. Details on this have not been published. (pbe/SDA)