🇨🇭❗️Cable FX Macro Weekly Note: Switzerland Inflation

**As seen in Risk In The Week report 11/01/25, get full access now!

Swiss consumer prices remain subdued, the September figure came in steady at 0.2% Y/y. This marks the continuation of a disinflation trend, with headline inflation well within the Swiss National Bank's (SNB) 0-2% target range. The core metric rose 0.7% Y/y, which is within the recent monthly readings. Switzerland's inflation has decelerated rapidly from a 2022 peak of 3.5%, thanks to the SNB's aggressive rate hikes (policy rate at 1.25% as of September) and the franc's safe-haven appreciation curbing import costs. September's flat YoY rate aligns with SNB projections of 0.8% average for 2025, down from 1.1% in 2024. However, sticky core inflation (0.7%) and global risks (e.g., energy volatility) keep the SNB cautious—analysts expect a potential 25 bps cut in December if trends hold. Economists at ING warned that Swiss economic risks are tilted to the downside. ING said that with global energy prices still low and Swiss growth slowing, annual inflation could edge closer to 0% or even turn negative again. At this stage, it's clear the SNB would prefer to avoid returning to negative rates, and we do not expect further rate cuts.