Negative rates cannot be ruled out, nothing is off the table

The new president of the Swiss National Bank (SNB), Martin Schlegel, took to the news phones on Tuesday, warning that further interest rate cuts were not out of the question. The incoming SNB president formally took the reins of Switzerland’s central bank early Tuesday, inheriting a central bank still reeling from last year’s erratic handling of the 167-year-old merger between Credit Suisse and UBS.

Key highlights

The service sector is solid, and the industrial sector modest.

I expect Swiss growth to be subdued in the coming quarters.

The biggest risk to the Swiss economy is developments abroad.

Last week we did not rule out further interest rate cuts.

We cannot rule out negative rates at the moment, we are not ruling out anything.

The reason for last week’s rate cut was to reduce inflationary pressure.

Without the interest rate cut, inflation forecasts would have been slower.

The main problem for Swiss exporters is lower demand abroad.