SNB chairman says Fed independence 'important for the world'

• The Swiss franc appreciated 14.5% against the dollar in 2024, its strongest annual gain since 2002, driven by global trade tensions and Trump's tariff policies
• Dollar holdings represent about 36% of the SNB's 765 billion francs ($966 billion) in foreign currency reserves, with recent franc strength reducing the value of these dollar-denominated assets
• The SNB has no plans to change its 1,040 metric tons of gold holdings, which generated a 36.3-billion-franc profit last year, and remains unconcerned about potential negative inflation readings in coming months

Summary

Swiss National Bank (SNB) Chairman Martin Schlegel strongly defended central bank independence amid ongoing political pressure on the U.S. Federal Reserve, stating it is "very important for the world" and crucial for controlling inflation. Speaking at the World Economic Forum in Davos on January 21, Schlegel emphasized that independent central banks typically maintain lower inflation rates.

The comments come as Fed Chair Jerome Powell faces a criminal probe from the Trump administration's Justice Department over building renovations, which Powell has called a pretext for pressuring rate cuts. The SNB joined several central banks in supporting Powell's independence.

Key Financial Data:

• Swiss franc surged 14.5% against the dollar in 2025, its strongest annual performance since 2002
• The franc gained an additional 1.4% this week amid global turbulence
• SNB holds 765 billion Swiss francs ($966 billion) in foreign currency reserves
• U.S. dollar assets comprise approximately 36% of SNB's reserves
• Gold holdings stand at 1,040 metric tons, generating a 36.3-billion-franc profit in 2025
• Swiss inflation climbed to just 0.1% in December, at the bottom of the 0%-2% target range

Market Implications:

The franc's appreciation as a safe-haven currency is reducing the value of SNB's dollar-denominated assets. However, Schlegel stated the bank has no plans to adjust its gold holdings or significantly alter its diversified portfolio, which includes government bonds, corporate bonds, and equities across multiple currencies. The SNB remains unconcerned about potential negative inflation readings, focusing instead on medium-term price stability.

Trump's tariff threats and geopolitical tensions, including disputes over Greenland, continue driving global economic uncertainty and safe-haven demand.