Switzerland’s 10-year government bond yield has fallen below 0.31%, its lowest level since early March, as investors responded to the Swiss National Bank’s decision to keep its policy rate at 0% and reiterate its willingness to intervene in foreign exchange markets. The move came despite an easing of Iran-related geopolitical tensions following a recent peace agreement, underscoring the SNB’s persistently cautious stance.
SNB President Martin Schlegel reaffirmed that the central bank stands ready to sell Swiss francs if needed to counteract any rapid or excessive appreciation that could threaten price stability. Policymakers continue to emphasize subdued inflation, which remains within the 0–2% target band, and note that upward price pressures in the outlook are limited.
By leaving rates unchanged for a fourth consecutive meeting, the SNB signaled that it sees no immediate need to tighten monetary policy. Inflation is projected to rise only modestly over the coming years, while economic growth is forecast to come in at around 1% this year.