On Thursday, the Swiss National Bank cut its key interest rate by 50 basis points to 0.5%, surpassing expectations of a smaller cut amid ongoing inflation challenges and a strong Swiss franc. This decision follows four rate reductions this year, marking Switzerland as the first major economy to ease monetary policy. New Chair Martin Schlegel attributed the cut to lower-than-expected inflation levels and indicated that negative interest rates are less likely moving forward. The bank’s updated inflation forecasts predict average annual inflation at 1.1% for 2024. Schlegel noted the potential need for future interventions to ensure price stability.
