Switzerland makes second interest rate cut as major economies diverge on monetary policy easing

The Swiss National Bank (SNB) has implemented its second interest rate cut, lowering its key interest rate by 25 basis points to 1.25%. This move reflects a divergence in monetary policy approaches among major economies, where sentiment on easing remains mixed. Two-thirds of economists polled by Reuters had predicted this outcome.

In response to the rate cut, the Swiss franc weakened, with the Euro gaining 0.3% and the U.S. dollar rising by 0.5% against the Swiss currency as of 8:55 a.m. London time. The SNB has also updated its inflation forecast, predicting a rate of 1.3% for 2024 and 1.1% for 2025.