Ex-SNB’s Jordan Sees Subzero Rates as Best Avoided Unless Needed

(Bloomberg) — Former Swiss National Bank chief Thomas Jordan said officials shouldn’t rule out a return to negative interest rates, even though the measure is best avoided.

The ex-president of the central bank, who left office a year ago after previously overseeing cuts in borrowing costs to the world’s lowest level, told public broadcaster SRF that such a policy was an “economic necessity” between 2015 and 2022.

More generally though, “whenever possible, you avoid introducing negative rates,” he said. “But there are of course constellations where you need to use them.”

The SNB has reduced its benchmark to zero, meaning that it is now on the cusp of a move into subzero territory if policymakers decide that a decade high in the franc is likely to hurt price stability. Jordan’s successor — Martin Schlegel — has said that any additional cut would face a higher bar than a conventional move.

A Bloomberg survey of economists published earlier on Monday showed that analysts expect the SNB to keep rates unchanged through 2027 and then hike them in the first quarter of 2028.

Jordan has rarely spoken publicly since he retired from the central bank in 2024. After he oversaw an increase in the rate above zero in 2022, he said at the time that the measure had “proved its worth” and would remain an “important monetary policy instrument, which we will use if needed.”

–With assistance from Bastian Benrath-Wright.

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