Analysis: Despite Trump's tariffs, the central bank is unlikely to lower interest rates below zero

Karsten Junius, an analyst at J. Safra Sarasin Sustainable, an asset manager, said the SNB is unlikely to cut interest rates below zero, even though high trade tariffs in the United States have hit the Swiss economy hard. The SNB cut its base rate to zero in June due to strong demand for the Swiss franc and offsetting headwinds for the country's main export products. Those headwinds were added to President Trump's statement that he would unexpectedly impose a steep 39 percent tariff on imports from Switzerland. But despite being hit by tariffs, the SNB is likely reluctant to cut interest rates below zero. Inflation in Switzerland has exceeded expectations and the zero-interest rate policy has stimulated economic activity. At the same time, further rate cuts would fuel US accusations of currency intervention by the Swiss National Bank.