The Swiss National Bank is expected to cut its benchmark interest rate by 25 basis points on Thursday, from 1.25% to 1.0%.

Reuters poll shows:

  • 30 of 32 economists expect a 25 bp cut
  • 1 expect a 50 bp cut
  • 1 expects no change
  • further ahead, 18 of 32 expect a hold in December

Factors cited include:

  • SNB raised interest rates more modestly than major peers
  • SNB began cutting sooner, first one was in March
  • Swiss inflation fell to 1.1% in August, the lowest among G10 economies (the SNB target banks is 0-2%)
  • CHF has remained strong

For CHF traders, this is something to be wary of (Reuters):

  • "Policymakers will be unhappy with the franc's recent appreciation and will use rate cuts to try and stifle its ascent. Further ahead, if the franc continues to appreciate the SNB may revert to using large FX interventions," said Adrian Prettejohn, Europe economist at Capital Economics. "We think the SNB will not want to cut the policy rate much further, if at all, in response to a strong franc as policymakers will want to reserve some space to loosen policy in case a domestic shock occurs in the future."

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SNB decision due at 0730 GMT / 0330 US Eastern time on Thursday 26 September 2024.

SNB Spring