Swiss National Bank cuts interest rates by 0.25% in line with expectations and signals further easing

The Swiss National Bank cut interest rates by 25 basis points to 1%, the lowest in more than 1 ½ year, on its monetary policy meeting on Thursday.

The decision was in line with expectations and reflected new trend in easing policy after the European Central Bank and Fed lowered its borrowing costs recently.

The SNB argued its decision, which marks the third rate cut this year, by slowing inflation which remains withing the central bank’s 0-2% target range for more than one year and fell to 1.1% in August, leaving the door open for further easing.

SNB’s Chairman Jordan said that the central bank is ready to cut interest rates again as inflationary pressure continues to ease, adding that further cuts may become necessary to keep price stability.

In addition, Swiss National Bank lowered its 2024 inflation forecasts from 1.3% to 1.2% and also revised lower expectations for 2025/26, expecting consumer price growth of 0.6% (down from 1.1%) in 2025 and 0.7% (down from 1.0%) in 2026.