Benign inflation keeps Swiss National Bank on hold

What the desk is arguing

The desk believes that the SNB's decision to keep interest rates steady at 0% reflects confidence in its inflation management amidst a controlled environment. Per the full note source, the SNB appears unperturbed by recent inflation data, citing that significant price increases are limited to energy sectors, which have a muted overall impact on consumer prices.

Supporting this view, imported goods prices—a key component of the Swiss consumer price index (CPI)—have seen only a modest 0.7% rise year-on-year, underscoring the strength of the Swiss franc, which continues to exert disinflationary pressure. This context allows for a forecasting line that keeps inflation expectations low for the foreseeable future, with prevailing consensus holding the SNB's rate at 0%.

Where it sits in our coverage

Our current consensus target for USD/CHF stands at 0.7800, with a forecast range from 0.7600 to 0.8200 for March 2026. Notable revised targets include standardchartered at 0.7400 (Dec-26) and deutschebank at 0.7500 (Dec-26).

This desk's view remains broadly consistent with industry expectations, with our forecast similarly reflecting a cautious stance towards the evolution of monetary policy. The midpoint of our projections aligns near the consensus, suggesting room for mild adjustments rather than aggressive rate changes.

How other firms see it

Overall, firms like hsbc and barclays seem aligned with our view on the stability of CHF, with a muted outlook on rate changes from the SNB. Conversely, firms such as citi and jpmorgan have slightly more bullish targets for the CHF, reflecting a potential divergence in rate expectations.

Key related currency pairs to monitor include EUR/CHF and USD/CHF, as their movements may impact sentiment towards the SNB’s monetary policy and inflation outlook. Should these pairs exhibit volatility, it may provoke reassessment of the CHF's strength against both EUR and USD.