Switzerland's Rate Cut Amidst Global Trade Uncertainty

The Swiss National Bank cut its main interest rate to 0.25% amid concerns over global trade uncertainties linked to U.S. policies under President Trump. This reduction could be the last in the cycle, as the bank analyzes inflation and economic conditions while maintaining a cautious stance on future policy adjustments.

The Swiss National Bank (SNB) lowered its main interest rate to 0.25% on Thursday, as it navigates the uncertain waters of global trade policies set in motion by U.S. President Donald Trump. This marks the SNB's fifth consecutive rate cut since March 2024, citing controlled inflation with potential for further decline.

In response to the decision, the Swiss franc slightly weakened against the euro and the dollar. Chairman Martin Schlegel expressed caution regarding future decisions, stating that the SNB will analyze the global economic climate, particularly as uncertainties have amplified significantly.

As the central bank continues to monitor economic indicators, it contemplates foreign currency interventions to manage inflation, denying accusations of currency manipulation. The economic outlook remains uncertain, with the possibility of fluctuating trade barriers impacting growth.

(With inputs from agencies.)