SNB Ponders Sub-Zero Rates Amid Inflation Concerns

The Swiss National Bank (SNB) has indicated its willingness to take drastic measures to keep inflation within its target range. Speaking in an interview, Petra Tschudin, one of three policymakers who run the bank's interest rates, stated that negative interest rates are still on the table if necessary.

Tschudin emphasized that the SNB is not limited by the current 0% interest rate and would consider going below zero to keep inflation between 0% and 2%. She acknowledged that negative interest rates behave differently from positive ones, but this difference does not restrict their options.

The SNB's approach to monetary policy stands out for its lack of forward guidance. The bank avoids making public predictions about future rate changes, citing the difficulty of applying such a strategy in a small and open economy.