In recent years, rarely has an SNB interest rate decision been as unspectacular as Thursday's. As anticipated by markets, bank economists, and financial analysts, the key policy rate remains unchanged at 0 percent. The SNB’s estimate for GDP growth in 2025 also remains steady at 1 to 1.5 percent. The new forecast for the coming year, at «just under 1 percent», lies within the expected, rather cautious range.

The inflation forecast, a key instrument of monetary policy communication, has also changed little compared with June. It now stands at 0.2, 0.5, and 0.7 percent for 2025 and the two subsequent years.

For «SNB Watchers» the highlight of the press conference was the reference to the upcoming publication of a summary of the monetary policy discussion, announced earlier in September. During the briefing, the Governing Board, led by Presidnent Martin Schlegel - who will mark one year in office on October 1 - presented and explained the rate decision in its «opening remarks».

A New Communication Tool

However, readers will need to wait: the first such summary, reflecting the discussions leading up to the current decision, will only be released in four weeks. According to Schlegel, the document is intended to illustrate how the Governing Board assesses changes in the economic environment and what monetary policy actions it derives from these assessments.

President Martin Schlegel also sought to lower expectations for this«communication policy easing measure», noting that the SNB had previously categorically rejected publishing records of its deliberations. «The Governing Board is a collegial body that speaks with one voice externally. The summaries will present different considerations and arguments from the discussion, but they will not be attributed to individual members of the Board,» he emphasized.

Preserving an Open Discussion Culture

Schlegel further underlined that the summaries should support a healthy culture of debate «In our assessments, we discuss matters openly and, above all, without pre-determined outcomes.» During the Q&A session, he indicated that the summaries would span four to five pages, suggesting a limited level of detail.

As already stressed at the last monetary assessment in June, Schlegel reiterated that the hurdle for moving into negative interest rate territory is high—higher than for a rate cut above zero. Governing Board member Petra Tschudin explained that while negative rates, as implemented from 2015 to 2022, can be effective from a monetary policy perspective, they also entail side effects for savers, pension funds, and other stakeholders.

Why the Hurdle for Negative Rates is High

Tschudin added that the transmission mechanism changes under negative rates: banks are reluctant to pass them on to depositors on the liability side, while seeking compensation in their lending and investment activities on the asset side. This, in turn, alters the cost-benefit analysis of such a move. Schlegel noted that negative rates did indeed function between 2015 and 2022, when the goal was to reduce the attractiveness of the Swiss franc.

While the exchange rate remains an important factor for the SNB—once again affirming its readiness to intervene in the foreign exchange market if needed—the valuation of the franc does not currently pose an acute challenge to fulfilling its price stability mandate.

Immigration and Trade Issues Are Political Matters

Schlegel was also keen to temper broader expectations. Responding to criticism that the SNB’s expansionary monetary policy had fueled immigration in recent years, he countered: «That is a political issue, one for politicians to address. The SNB’s objective is to fulfill its mandate within the given environment.»

On tariff disputes with the United States, the president also drew a clear line: «Trade policy is the responsibility of the federal government.» The fact that the U.S. continues to list Switzerland among potential currency manipulators did not trouble him. Switzerland, he said, has been in close contact with the Federal Reserve and the U.S. Treasury for years. He also emphasized that the SNB would not allow itself to be constrained in its monetary policy - it would intervene in the foreign exchange market if that were the most appropriate tool in a given situation.