Swiss National Bank Cuts Interest Rate to 1%

The Swiss National Bank (SNB) has cut its policy interest rate by 25 basis points to 1.00%, marking its third reduction this year and aligning with similar actions by the European Central Bank and U.S. Federal Reserve. This decision comes as inflation in Switzerland has decreased to 1.1%, well within the SNB's target range, leading to expectations of further cuts in upcoming quarters to maintain price stability. The market had anticipated this move, with a 55% probability priced in for a 25 basis point cut. SNB Chairman Thomas Jordan, in his final meeting, emphasized the need for continued monetary easing due to the challenges posed by a strengthening Swiss franc on exporters. The central bank also revised its inflation forecast downward, projecting an average of 1.2% in 2024, significantly lower than previous estimates. Economic growth is expected to remain modest, with GDP forecasts of around 1% for 2024 and 1.5% for 2025.