Swiss National Bank: Inflation pressures build – Nomura

Nomura’s European Economics team, led by Josie Anderson, George Buckley and Andrzej Szczepaniak, expects the Swiss National Bank to keep its policy rate at 0.00% at the September 2026 meeting. They highlight stronger GDP growth, a recent rise in inflation and CHF depreciation, and see a possible shift back to standard FX intervention language, with no rate hikes projected before 2028 at the earliest.

SNB seen on hold as CHF softens

"We expect the SNB to leave its policy rate unchanged at 0.00% at its September meeting. Inflation has accelerated, driven higher by energy prices, but core inflation remains low."

"As EUR/CHF is near its highest level since early 2025, we think Swiss policymakers could feel it is unnecessary to signal an increased willingness to intervene. On the other hand, with the Iran war re-escalating, the SNB may still want to show that it is alert to possible upward pressures on CHF, and keep the June guidance for now."

"In the latest data, inflation surprised to the upside, rising to 0.8% y-o-y in August from 0.4% in July, the fastest rate since September 2024. Much of the rise was driven by higher energy prices, as core inflation remained low at 0.4% y-o-y. We are forecasting inflation in Q3 to be in line with the SNB’s forecast of 0.7% q-o-q and then accelerate to 1.0% q-o-q in Q4."

"The SNB is therefore likely to revise up its estimate of GDP growth for the year, as even no growth in H2 would lead to a 1.8% expansion for the year as a whole, above the SNB’s June expectation of “around 1%”."

"Overall, our central forecast is for the SNB’s policy rate to remain at 0.00% until at least the end of 2027. If inflation sustainably rises to 1% or higher (i.e. around the middle of the SNB’s inflation target of 0-2%), we believe policymakers may discuss the need to raise rates in 2028."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)