Will the SNB raise interest rates again?

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Inflation accelerated again in February, reaching 3.4 percent. This puts the Swiss National Bank (SNB) under pressure. The key interest rate is currently 1.0 percent, thus well below the inflation rate.

Economists expect a new rate hike. The majority expect an increase of 0.5 percent.

Thus, the SNB will raise the main interest rate more than the US Federal Reserve. This increased interest rates by 0.25% yesterday despite the banking crisis. The European Central Bank increased interest rates by 0.5 percent last week.

Might be the last hike

“So far we’ve assumed a 50bp move, but it wouldn’t be surprising if it’s only 25bp,” Daniel Kalt, chief economist at UBS Switzerland, told the cash.ch financial portal. Raiffeisen Investment Manager Matthias Geissbühler also forecasts a substantial 50 basis point rate hike this Thursday. But he assumes this will be the last rate hike.

The question now is how the crisis surrounding Credit Suisse will affect the SNB’s interest rate decision. But this is of secondary importance, according to SGKB Investment Manager Thomas Stucki: “CS’ problems have little to do with the SNB’s rate hikes. Therefore, the development of inflation and the economy is more important for the interest rate decision. Both are speaking in favor of the SNB separating the issues.” He also assumes that the SNB will continue to tighten interest rates.

Source :Blick