interest rates are on the cards as soon as June. The 0.3% conditional forecast for next year is probably too close to comfort for policymakers, especially given the recent record of revising these down at every single meeting this year,” Kyle Chapman, FX markets analyst at Ballinger Group, said in a note following the decision. Schlegel stressed that Switzerland can withstand a “temporary” period of inflation sitting outside of the SNB’s price stability range of 0% to 2%, but said the institution targets consumer price growth within that interval in the medium term. He did not exclude the possibility of resorting to negative interest rates to manage that objective. “Negative interest rates are unpopular. Nobody likes negative interest rates. Also the SNB does not like negative interest rates. But we cannot rule out at the current junction to introduce negative interest rates again in the future, if necessary,” he said. This step, he acknowledged, helped tame the attractiveness of the Swiss franc during a seven-year stretch that ended in 2022. Schlegel also left the door open for a potential SNB initiative to deploy its vast balance sheet and intervene in the foreign exchange market to rein in the national currency. The U.S. dollar had risen by 0.4% against the Swiss franc by 9:17 a.m. London time, while the euro gained 0.57%. “The franc is likely to come under more appreciative pressure as the ECB outpaces the SNB in cutting rates and the uncertainty around a Trump presidency heightens safe haven flows,” Ballinger’s Chapman noted.