Switzerland: Refilling the Punch Bowl

The SNB cut rates last week—ushering in a period of easier monetary policy across developed markets, and good times for risk assets everywhere

Peripheral central banks are often helpful bellwethers for the direction of global monetary policy. The last time the monetary policy cycle turned, in late 2021, it was the Reserve Bank of New Zealand (RBNZ) that led global central banks toward higher interest rates to combat inflation. All major central banks followed—with the Bank of Japan finally nudging rates upwards last week.

This time, it was the turn of the Swiss National Bank (SNB) to fire the starting gun. Last week, it cut rates by 25basis points from 1.75% to 1.5%, becoming the first major developed market central bank to cut interest rates during this cycle.