The Swiss National Bank’s latest interest rate decision, released on September 25, 2025, kept the policy rate at 0.00%, unchanged from the previous quarter and consistent with the past 12 months. This decision aligns with the SNB’s cautious approach amid a complex macroeconomic environment characterized by low inflation, moderate economic growth, and heightened external uncertainties.

Drivers this month

• Inflation remains subdued at 0.70% YoY, well below the SNB’s 2% target.
• GDP growth slowed to 0.30% QoQ in Q2 2025, down from 0.60% in Q1.
• Unemployment steady at 2.10%, signaling stable labor market conditions.
• Global geopolitical tensions continue to pressure safe-haven flows into CHF.
• Fiscal policy remains neutral with a balanced government budget.

Policy pulse

The SNB’s zero interest rate stance remains accommodative but cautious. Inflation’s persistent undershoot of the 2% target justifies no immediate tightening. The SNB emphasizes flexibility, signaling readiness to adjust policy if inflation accelerates or external shocks intensify.

Market lens

Following the announcement, the Swiss franc (CHF) appreciated modestly by 0.15% against the euro (EURCHF), reflecting safe-haven demand. Swiss 2-year government bond yields held steady near -0.50%, while breakeven inflation rates remained subdued at 0.90%, indicating low inflation expectations.

Core macroeconomic indicators underpinning the SNB’s decision show a mixed but generally subdued outlook. Inflation remains below target, economic growth is moderate, and labor markets stable. These fundamentals support the SNB’s neutral policy stance.

Inflation and growth

According to the Sigmanomics database, Switzerland’s headline CPI inflation stood at 0.70% YoY in August 2025, unchanged from July and well below the 2% target. Core inflation, excluding volatile food and energy, was 0.50% YoY, reflecting weak domestic demand and moderate wage growth.

GDP growth slowed to 0.30% QoQ in Q2 2025, down from 0.60% in Q1, driven by weaker export demand and cautious consumer spending. Compared to the 12-month average growth rate of 0.40% QoQ, this marks a slight deceleration but remains positive.

Labor market and fiscal stance

Unemployment remained stable at 2.10% in August 2025, near historic lows, supporting household income and consumption. Government budget data show a balanced fiscal position, with a slight surplus of 0.10% of GDP in H1 2025, indicating no immediate fiscal stimulus or drag.

External environment

Geopolitical risks, including tensions in Eastern Europe and trade uncertainties, continue to weigh on Swiss exports and financial markets. The franc’s safe-haven status has led to moderate appreciation pressures, complicating the SNB’s inflation outlook.

What This Chart Tells Us

Market lens

Immediate reaction: CHF appreciated 0.15% vs. EUR, while 2-year yields remained flat near -0.50%. Breakeven inflation rates held at 0.90%, signaling steady inflation expectations.

Looking ahead, the SNB’s policy trajectory depends on inflation dynamics, growth momentum, and external risks. The central bank’s forward guidance suggests patience, with a bias toward maintaining the status quo unless inflation deviates significantly.

Bullish scenario (20% probability)

• Inflation accelerates toward 1.50%-2% by mid-2026 due to stronger wage growth and commodity prices.
• GDP growth rebounds above 0.50% QoQ, supported by export recovery and fiscal stimulus.
• SNB begins gradual rate hikes in H2 2026 to preempt overheating.

Base scenario (60% probability)

• Inflation remains subdued around 0.50%-1% through 2026.
• GDP growth stays moderate near 0.30%-0.40% QoQ.
• SNB maintains zero rates with occasional verbal interventions to manage CHF strength.

Bearish scenario (20% probability)

• Global recession risks intensify, dragging Swiss exports and growth below 0.10% QoQ.
• Inflation falls toward zero or negative territory, risking deflation.
• SNB considers easing measures or negative rates to stimulate demand.

The SNB’s September 2025 interest rate decision reflects a balanced approach amid subdued inflation and moderate growth. The zero rate policy supports financial stability but leaves limited room for maneuver if external shocks intensify. Market participants should monitor inflation trends, geopolitical developments, and fiscal policy shifts closely. The franc’s safe-haven status remains a key variable influencing monetary conditions.

Key Markets Likely to React to SNB Interest Rate Decision

The SNB’s interest rate stance directly impacts Swiss financial markets and global investors seeking safe assets. The following symbols historically track SNB policy moves and Swiss macro conditions:

• SIX – Switzerland’s primary stock exchange, sensitive to domestic monetary policy.
• EURCHF – Euro to Swiss franc exchange rate, reflecting currency market reactions.
• BTCUSD – Bitcoin’s USD pair, often influenced by risk sentiment shifts linked to monetary policy.
• NESN – Nestlé, a bellwether Swiss multinational sensitive to currency fluctuations.
• USDCHF – US dollar to Swiss franc pair, a key indicator of safe-haven flows.

FAQs

What is the current SNB interest rate?

The SNB interest rate remains at 0.00% as of September 2025, unchanged since mid-2024.

How does the SNB decision affect the Swiss franc?

The decision supports a stable franc, with safe-haven demand causing modest appreciation post-announcement.

What are the risks to SNB’s monetary policy outlook?

Key risks include global recession, deflationary pressures, and geopolitical shocks that could force policy easing or tightening.

Takeaway: The SNB’s steady policy rate amid subdued inflation and moderate growth signals cautious patience, with future moves hinging on inflation and external risks.