SNB emancipates itself – Rate hike: The SNB is good for a surprise – News

Thomas Jordan, President of the Swiss National Bank (SNB), has repeatedly had to put up with the accusation that his hands are tied in recent years. He was held hostage by the ECB, could not make an autonomous monetary policy and could only raise the key interest rate after the ECB.

There was a legitimate concern behind this: a more attractive Swiss interest rate could attract even more investors, and this could further strengthen the already strong Swiss franc.

Braver than many expected

Today, the three-person Governing Board of the SNB demonstrated: it can be done. They raised their key rate surprisingly early and sharply. Until recently, most experts would not have believed that the monetary watchdogs would rush ahead of the ECB.

This step was made possible because it is already virtually certain that the ECB will also raise its key interest rate for the first time in July. The financial markets have already “priced this in”, as they say in jargon: in other words, prices have already anticipated the turnaround in interest rates in the euro zone. That gave the SNB some breathing room.

The fact that the American Federal Reserve, the FED, had once again raised its key interest rate sharply the previous evening certainly helped. This cleared the way for the turnaround in interest rates in Switzerland: the Governing Board seized this opportunity and surprised many with it.

Early intervention should protect Switzerland

There is indeed something bold about the rate hike – not just in timing, but in scale. The SNB could have raised interest rates less sharply, for example by 25 instead of 50 basis points. But with her decision she marks determination. Their core message is unmistakable: we are serious about fighting inflation!

The calculation could work: While the American and European central banks are already chasing inflation rates of 8 to 9 percent that have already gotten out of hand, the SNB is acting proactively to a large extent. It has better chances of fulfilling its mandate of ensuring stable prices.