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SNB boss Thomas Jordan does not rule out a further tightening of key interest rates.
The Swiss National Bank (SNB) has already increased key interest rates three times in the past year. SNB Director Thomas Jordan (59) has “not ruled out” several times that there could be further increases. He also repeated this statement in various interviews as part of the WEF in Davos.
Compared to the news portal “Bloomberg”, he became a little clearer in English: “It’s in the cards,” he says – which means that there is a probability bordering on certainty. Since inflation is still above 2 percent, a “certain tightening” is imminent.
Bloomberg predicts that Switzerland will add another half a percentage point to the key interest rate from March. The analysis is based on the finding that the central bank’s latest inflation estimate for 2023 is 2.4 percent. With that above the 2 percent cap, everything points to further tightening.
Switzerland is still doing well, but…
Of course, Switzerland is still doing comparatively well. Inflation is significantly higher elsewhere. In addition, our economy should cool down in the current year, but still grow by 0.5 percent.
Meanwhile, uncertainties remain. Prices are rising for services, rents and electricity. The domestic price environment has shifted. Companies are less afraid to pass on higher prices to customers.
Jordan does not rule out a slight recession – depending on the development of the global economy. To prevent this from happening, the SNB wants to do everything in its power to keep inflation below 2 percent in the medium to long term.
profit is unimportant
After the record loss of CHF 132 billion, the National Bank recently waived the usual distributions to the cantons and the federal government. In an interview with «CH Media», Jordan does not want to predict whether this waiver will remain an exception.
The most important purpose of the SNB is to shape monetary policy and guarantee price stability. “The profit we can make is a side issue,” concludes Jordan. (rae)