SNB Rate Decision (Jun) Still not overly concerned by inflation

Research evidence excerpt

SNB Rate Decision (Jun) Still not overly concerned by inflation

Economics ● Switzerland

18 June 2026

In terms of annual forecasts, inflation is now expected by the SNB at 0.6% in 2026 and 2027 (previous: 0.5% for both). The annual

forecast for 2028 has also been lifted by 0.1ppt (0.7% instead of 0.6%).

2. SNB Inflation annual forecasts

% y-o-y 2026 2027 2028

Forecast Jun 26, with SNB policy rate at 0.00% 0.6 0.6 0.7

Forecast Mar 26, with SNB policy rate at 0.00% 0.5 0.5 0.6

Source: SNB

Finally, the SNB’s expectations for Swiss economic activity have not changed relative to March. The Bank still expects GDP growth

to be “around 1%” in 2026 and then to improve to 1.5% in 2027.

In its press conference, SNB President Martin Schlegel indicated in the Q&A session that uncertainty around energy prices was still

elevated despite the recent US-Iran deal and that it was still unclear whether the recent de-escalation would be permanent.

Implications

The lack of significant changes in the SNB communication and in medium-term inflation forecasts confirms our central view: we still

expect the policy rate to remain steady at 0% through 2026 and 2027. The fact that inflation is expected to remain below 1% (so in

the lower part of the 0-2% inflation target) until the end of the SNB forecast horizon suggests that rate hikes are still not in the cards.

Markets are currently pricing some chances of a rate increase in the coming quarters but a 25bp rate hike is not fully priced in by the

end of 2027 (Chart 4).

Ahead of the meeting, there was some uncertainty as to whether the language on FX interventions would be amended. The lack of

changes is not a surprise to us, given that the uncertainty related to the situation in the Middle East remains elevated. Besides, even