The Swiss National Bank cut its benchmark interest rate by 25 basis points to 0% on Thursday, marking the lowest level since 2022 and amplifying the gap between U.S. and Swiss rates to record highs.
The move pushes the gap between the U.S. federal funds rate upper bound and Switzerland’s rate to 4.5 percentage points—the largest differential on record.
What It Means For The Economy
The SNB said its decision was influenced by declining inflationary pressure and a deteriorating global economic outlook.
“In its baseline scenario, the SNB anticipates that growth in the global economy will weaken over the coming quarters,” the central bank said. While it sees inflation in the U.S. rising, further declines are expected in Europe.
The SNB also warned that risks remain tilted to the downside, citing potential trade tensions and uncertainty around fiscal policy.
The Swiss rate cut means businesses and …