Swiss National Bank Negative Rates Are Off Most Economists’ Agenda for Next Week

(Bloomberg) — The Swiss National Bank is now predicted by almost all economists to keep its interest rate unchanged next week after several of them switched from expecting a cut below zero.

Just two out of 21 forecasters surveyed by Bloomberg now reckon Switzerland’s central bank will lower its key rate to -0.25% on Thursday. That’s down from seven out of 22 respondents in a poll last month.

Some economists, including those at ING and Nomura, now expect zero to be the SNB’s terminal rate. Those at Barclays and Capital Economics, as well as Jean Dalbard at Bloomberg Economics, pushed back their predictions for a cut by three months, penciling it in for December. Roughly a quarter of the sample forecast a reduction at that meeting, the final one of the year.

The consensus view of no change on Sept. 25 follows encouraging news for the SNB after inflation accelerated slightly and stayed within its target range for three months in a row.

That has lessened pressure for a return to the negative monetary policy stance that the SNB exited three years ago. Officials including President Martin Schlegel insist there’s a higher bar for such a move than that applied to a normal cut rate, given the adverse effects of subzero borrowing costs on pensions and the financial system.

What Bloomberg Economics Says

“The SNB will likely keep the policy rate unchanged at its September meeting. Still, the disinflationary impulse from the currency and the hit to the economy from tariffs are likely to push the central bank to move rates below zero by the end of the year.”

—Jean Dalbard, economist. For full Insight, click here

While a minority do predict such a move in due course, the median expectation of economists is that the SNB will stay unchanged until the end of 2027. That result matches last month’s survey.

The upcoming meeting will break new ground for the SNB, because it will be followed by a published summary of arguments weighed at the decision, in a move bringing it closer to the practice of larger peers that publish minutes. The account will be made public four weeks later, some time in October.

The Bloomberg survey also showed that economists expect high US tariffs on Switzerland to weigh on growth this year. In the third quarter, output, adjusted for large sports events, is now seen shrinking by 0.2%. That would be the first contraction in more than two years.

In this year’s final quarter the export-driven economy will stagnate, according to the poll. Government data on Thursday showed that foreign sales to the US dropped almost a quarter in the first month that the 39% levy imposed by Washington took effect.

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