European Economic Comment "SNB: What to expect on 18 June" Huefner

Research evidence excerpt

European Economic Comment "SNB: What to expect on 18 June" Huefner

What to expect from the inflation forecast

As usual, the conditional inflation forecast should be viewed as the main guidance tool

(for a detailed discussion see the focus article in our September 2025 Switzerland

quarterly). The main elements to watch are the end-point in Q1 2029 and the slope of

the forecast. We expect the SNB to revise up its oil price assumption and also take into

account the slight weakening of the CHF. Against this backdrop, we expect the 2026

forecast to remain unchanged at 0.5%, the 2027 forecast to be lifted by 10bp to 0.6%

and the 2028 forecast to remain at 0.6%. For the Q1 2029 end-point, we expect 0.8% -

a slight increase from the 0.7% the SNB projected last time and largely reflecting a

somewhat wider rate differential dampening the exchange rate. With Q1 growth

stronger but consumption and the labour market weaker than expected, we expect the

2026 sports-event adjusted GDP forecast to remain at "around 1%" and 2027

at"around 1.5%" (UBSe for sports-event adjusted GDP: 0.7% in 2026, 1.4% in 2027).

What to expect from the press conference

We expect questions in the press conference to focus on two themes. First, the SNB may

be asked about implications of the ECB decision to hike rates the week before. We

expect the SNB to stress the uncertainty of inflation outcomes in both directions. It may

state that it is monitoring inflation developments closely and would be ready to tighten

policy if inflation pressures broadened out, but at the same time reiterate its

preparedness to cut rates into negative territory if needed. Second, the SNB will likely be

asked to comment on the outcome of the "10 million initiative", which is taking place

on 14 June (see our primer here).