SNB Rate Forecasts Now Anticipate Hike in Mid-2027 at Earliest

(Bloomberg) — Swiss National Bank forecasters pushed back predictions for an interest-rate increase, with no move anticipated before next June at the earliest.

Economists who had reckoned on borrowing costs rising as soon as this year now don’t see any move until 2027, and the majority assume a first hike only in early 2028, according to a monthly Bloomberg survey.

The shift in view follows Bloomberg’s reporting that the current expectation inside the SNB is for the policy rate to stay at zero until the end of 2027, before it then probably rises. That outlook assumes that no further shocks occur, and matches the consensus of economists.

Swiss officials had cut their benchmark to zero last year as they contended with slow inflation and a strong franc. Since then, price growth has quickened very slightly to 0.4%, while the currency is trading at similar levels.

Policymakers have fought a temporary surge in the franc by threatening and executing market interventions, while keeping borrowing costs unchanged.

Maxime Botteron, an economist at UBS, flagged a positive impulse to Swiss economic expansion from the region as one reason to expect the SNB to start raising rates as soon as in June.

“With inflation below 1% and GDP growth below potential, a slightly expansionary monetary policy appears appropriate,” he said. “However, stronger demand from the euro zone should lift GDP growth closer to trend in 2027, warranting a gradual normalization of monetary policy over the course of next year.”

A first estimate for how much the Swiss economy grew in the second quarter is due on Friday. Most analysts expect a slight slowdown to 0.3% after 0.4% at the beginning of the year.

–With assistance from Harumi Ichikura.

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