While annual inflation is 1.1%, I estimate it to be -0.2% when measured over 3 months. I expect the SNB to respond by cutting interest rates when it meets later this month.
Relevant analysis of Swiss inflation which provides evidence that a rate cut at the upcoming SNB meeting is highly likely. It seems that the main component driving this inflation are rents! Given the negative impact of imported inflation, I wonder whether the SNB will resume foreign asset purchases.
Thanks for the clear analysis. The markets have started pricing the possibility of a 50bps cut in September. How realistic is it in the context of the SNB?
Very interesting analysis! I am wondering if they would consider 50bps cut or engage in further FX intervention.
Hi Stefan,
Relevant analysis of Swiss inflation which provides evidence that a rate cut at the upcoming SNB meeting is highly likely. It seems that the main component driving this inflation are rents! Given the negative impact of imported inflation, I wonder whether the SNB will resume foreign asset purchases.
Thanks for the clear analysis. The markets have started pricing the possibility of a 50bps cut in September. How realistic is it in the context of the SNB?