The outlook is clouded over
SNB boss Jordan does not rule out the next interest rate hammer
In an international comparison, inflation in Switzerland is low. Thomas Jordan, Director of the Swiss National Bank, nevertheless believes that a tighter monetary policy is necessary.
Thomas Jordan, President of the Swiss National Bank.
In Switzerland, too, the short-term economic outlook has clouded over. As in other countries, the level of uncertainty is high. Nevertheless, the Swiss National Bank (SNB) does not rule out further interest rate hikes, even after two interest rate increases, as SNB President Thomas Jordan (59) explained in the annual discussion with the Federal Council.
In an international comparison, inflation in Switzerland is low, but it is above the range that the SNB equates with price stability, according to a statement by the Swiss government at the meeting with Jordan on Wednesday.
Not just pandemic and Ukraine
There were increasing signs that the price increases would increasingly spread to goods and services that were not directly affected by the war in Ukraine or the consequences of the pandemic. Against this background, the SNB already raised the key interest rate in June and, in a further positive step, raised it to 0.5 percent in September, the Federal Council continues.
In addition, the SNB had allowed the franc to appreciate nominally since December 2021 in order to curb inflationary pressure. The tighter monetary policy is necessary to counteract the increased inflationary pressure and to make it more difficult for goods and services to spread to goods and services that have so far been less affected by inflation, SNB President Thomas Jordan is quoted in the statement as saying.
«Ensure price stability»
“It cannot be ruled out that further interest rate hikes will be necessary to ensure price stability in the medium term.” In addition, SNB President Jordan explained the situation on the Swiss real estate and mortgage markets. According to the Federal Council, another topic of discussion was the prospects for the SNB’s profit distribution. Details on this have not been published. (pbe/SDA)