SNB Holds Rates at 0.00% as Inflation Forecasts Edge Lower
Key Takeaways (Neutral to Dovish Tilt):
Policy rate unchanged at 0.00%, with the SNB reiterating readiness to intervene in FX markets when necessary.
Inflation forecasts trimmed across 2026–2027, reinforcing subdued price pressures and a low-inflation environment.
Economic outlook improves slightly, supported by lower U.S. tariffs and resilient global conditions, but risks from global trade policy remain significant.
Summary of the statement from the SNB rate decision.
Earlier today, the Swiss National Bank kept its policy rate unchanged at 0.00%, matching expectations in its final decision of 2025. The SNB noted that inflation pressures remain virtually unchanged, but its updated forecasts show slightly lower inflation over the next several years—0.2% in 2025, 0.3% in 2026, and 0.6% in 2027—highlighting a persistently subdued price environment. Growth projections were modestly upgraded, with 2025 GDP now seen at 1.5% and 2026 GDP around 1.0%, reflecting the positive economic impact of lower U.S. tariffs on Swiss goods and somewhat stronger global activity.
Even with these improvements, the SNB emphasized that the main risk to Switzerland’s outlook remains the global economy, particularly uncertainties surrounding U.S. trade policy. The Bank observed that global growth has been more resilient than previously assumed but warned that tariffs could still weigh more heavily on momentum ahead. The SNB reiterated its willingness to intervene in the foreign exchange market if needed to maintain appropriate monetary conditions. Overall, the tone of the statement is neutral with a dovish lean, reaffirming stable policy while acknowledging persistently low inflation and lingering global risks.
Comments from SNB Schlegel
Key Takeaways (Dovish Tilt):
Policy remains expansive, with the SNB signaling inflation will rise gradually in coming quarters due to supportive monetary conditions and improving growth.
Inflation outlook is “practically unchanged,” and the SNB remains ready to intervene in FX markets, keeping a bias toward maintaining easy policy rather than tightening.
Return to negative rates unlikely, but Schlegel emphasized they remain available if deflation or major global shocks re-emerge.
Summary and Analysis of comments from SNB Schlegel
Chairman Martin Schlegel said the SNB expects inflation to rise slowly in the coming quarters but stressed that medium-term inflation pressure is essentially unchanged from the previous assessment. He reiterated that the current stance is appropriate and continues to support both price stability and economic growth.
Schlegel noted that low interest rates remain effective largely through the exchange rate channel, and the Bank stands ready to intervene in FX markets if needed. Although the SNB downplayed recent softer inflation readings, it emphasized that risks remain elevated, including U.S. tariff policy. At the same time, uncertainty has “slightly declined,” and the global economy is expected to grow moderately.
Importantly, the SNB repeated that while the threshold for returning to negative interest rates is much higher than in the past, the tool remains available should deflationary forces return. The recent U.S. reduction in tariffs on Swiss goods was acknowledged as supportive, but not policy-changing.
Overall, the message reinforces that the SNB is comfortable staying on the dovish side of neutral, preferring to maintain accommodative conditions and relying on FX management rather than rate hikes to guide inflation back through its target zone.
USDCHF Technical Analysis: SNB’s Dovish Tone and FX Intervention Warning Fuel Sharp CHF Strength
Although the SNB’s policy statement leaned neutral to dovish, with inflation forecasts trimmed for 2026 and 2027, Chairman Schlegel’s reluctance to even discuss a return to negative interest rates gave the Swiss franc a subtle tailwind. More importantly, the SNB repeated its willingness to intervene in the foreign exchange market when necessary — a reminder that tends to spook USDCHF buyers and discourage aggressive CHF selling.
The reaction in USDCHF was immediate and decisive. The pair has dropped –0.65%, making it the biggest USD mover of the session. The decline accelerated after price action failed on a move higher and against the 50% retracement of the entire trading range since the November high at 0.8000, with the session peak stalling at 0.8001 before sellers seized control. The slide then cut cleanly through the broken 38.2% retracement of the same move at 0.7971, and now opens the door toward a key swing-area support zone between 0.7923 and 0.79283 — the next major decision point for traders.
In the video above, I (Greg Michalowski, author of Attacking Currency Trends) break down the technical factors driving the move, outline where the risk is, and map out the next targets that matter most for USDCHF traders.
Be aware. Be prepared.
