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SNB rates not yet restrictive enough to tame prices, Jordan says

swiss national bank
Inflation warriors: the Swiss National Bank in Bern. © Keystone / Anthony Anex

The Swiss National Bank’s interest-rate moves haven’t yet fully tamed inflation, according to its President Thomas Jordan. 

“Monetary policy is still not restrictive enough to anchor inflation in the area of price stability,” Jordan said on Wednesday in Chur, Switzerland. “We cannot exclude that we have to further tighten monetary policy.”

+ More on inflation in our latest economic update

Switzerland’s central bank has lifted rates by 225 basis points since last June. While the SNB – which next meets on June 22 – kicked off its tightening cycle earlier that the European Central Bank, its schedule of just one meeting a quarter means it has raised borrowing costs by less than its euro-area counterpart.

Comparatively slow Swiss inflation has also allowed this less aggressive stance: Consumer-price growth in April was just 2.6% – fraction of the rate in the surrounding euro area. Still, the SNB sees inflation staying at 2% or higher through 2025, hovering on the upper edge of its target range.

“If the inflation forecast is significantly above the area of price stability, then monetary policy is too loose,” Jordan said, adding that the current forecast is close to the central bank’s target.

©2023 Bloomberg L.P.

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