Davos: ECB's Schlegel on the Impact of Geopolitics on Inflation

• Swiss inflation is 0.1%, at the bottom of the SNB's 0-2% target range, but is forecast to rise into the target range over the medium term.
• The current monetary policy with a 0% interest rate is considered appropriate, with a high bar for further cuts.
• Geopolitical risks are identified as the biggest concern, potentially leading to Swiss franc appreciation and impacting inflation.
• The SNB is prepared to intervene in foreign exchange markets if necessary to maintain appropriate monetary conditions.
• Central bank independence is crucial for fulfilling the mandate.

The President of the Swiss National Bank, Thomas J. Jordan, stated that current monetary policy with zero interest rates is appropriate, as Swiss inflation, currently at 0.1%, is expected to rise into the 0-2% target range in the medium term. He highlighted geopolitical risks as the biggest concern, potentially impacting the Swiss franc and inflation, but affirmed the SNB's readiness to intervene in FX markets if necessary.