I expect the SNB to cut rates, perhaps aggressively, on December 11 and into the new year. With bad luck, we could be back to zero interest rates by next summer.
Thanks Stefan for the detailed analysis. I assume that the SNB can tolerate inflation close to zero if the economic activity and the labour market are solid. If inflation was negative and the policy rate at the ZLB, then the SNB will likely resume asset purchases. It remains to be seen whether central banks are still willing to set rates into negative territory.
We will see in December by how much will the SNB cut its policy rate.
Thanks Stefan for the detailed analysis. I assume that the SNB can tolerate inflation close to zero if the economic activity and the labour market are solid. If inflation was negative and the policy rate at the ZLB, then the SNB will likely resume asset purchases. It remains to be seen whether central banks are still willing to set rates into negative territory.
We will see in December by how much will the SNB cut its policy rate.