SNB Maintains Zero Rate While Widening Inflation Forecasts

The Swiss National Bank (SNB) has maintained its policy rate at zero while revising its inflation forecasts upward. The quarterly assessment, released on September 29, 2026, shows average inflation is expected to reach 0.7% for 2026, up from the previous forecast of 0.6%. Forecasts for the following two years are also revised upwards, with 0.8% anticipated.

The SNB attributes most of the rise in inflation since the last assessment to energy costs and a weaker Swiss franc. The central bank's decision has widened the gap with the European Central Bank (ECB) and the Federal Reserve, which have tightened their policies over recent months.

Kinzey Capital Management Pte. Ltd., a Singapore-based investment firm, views the SNB's decision as a significant development for investors. According to David Nilson, Director of Private Clients at Kinzey Capital Management, 'the rate decision is the same for every investor,' but its impact depends on the specific capital and its obligations.

The SNB's policy path assumes an unchanged interest rate across the forecast horizon, which differs from market expectations. Traders see close to even odds of a rate increase at the next quarterly assessment and anticipate tightening beginning by early next year. Long-duration capital is particularly exposed to the normalization path traders now price.