SNB Chairman Thomas Jordan recently warned yesterday that the more inflation is entrenched in the perception of companies and households, the harder it is to bring it down. He highlighted the urgency of the situation, stating, “We have to bring it back below 2% as soon as possible.”
Discussing the bank’s approach towards interest rates, Jordan assured that Switzerland’s are “still very low”. “We don’t see a big risk in over-tightening monetary policy. It is not something that will damage financial stability in general in Switzerland,” he affirmed.
Regarding the financial stability issues surrounding Credit Suisse, Jordan clarified that it was an individual case where the problem was not interest rates, but rather a “lack of trust of market participants in an institution.”
Looking ahead, market expectations suggest a 25bps rise from the current 1.5% level when the central bank delivers its next assessment in June.
