Without today’s rate cut, inflation forecast would have been lowerWill continue to monitor inflationary pressuresAnd will adjust monetary policy if necessary to maintain price stabilityRemains willing to intervene in FX market as necessaryRate cuts will continue to be the main instrument if monetary policy needs to be eased furtherDevelopments abroad are the main risk to the Swiss economyPolitical uncertainty in Europe has risenFuture course of US economic policy is uncertainDevelopment of the Swiss franc is still an important factor to be wary about
Given the fact that they lowered their inflation forecasts, it will be crucial to watch how the Swiss franc performs going into next year. The last thing the SNB would want is to invite deflationary pressures again. That especially since the Covid pandemic gave them a get out of jail free card, much like it did for Japan.
This article was written by Justin Low at www.forexlive.com.
