Latest news with #MartinSchlegel
Yahoo
4 days ago
- Business
- Yahoo
Swiss Inflation Turns Negative for First Time in Four Years
(Bloomberg) -- The inflation rate in Switzerland turned negative for the first time since early 2021, adding to pressure on policymakers to lower borrowing costs later this month. Where the Wild Children's Museums Are Billionaire Steve Cohen Wants NY to Expand Taxpayer-Backed Ferry The Economic Benefits of Paying Workers to Move At London's New Design Museum, Visitors Get Hands-On Access LA City Council Passes Budget That Trims Police, Fire Spending Consumer prices fell 0.1% from a year ago in May, according to the country's statistics office. That outcome was down from zero in April and matched the median estimate in a Bloomberg survey of economists. The switch to outright disinflation reflects the strength of the franc, which has made imports so cheap that the foreign contribution to prices has already been negative for several months. That increases the onus to respond on the Swiss National Bank, which is widely expected to cut borrowing costs to zero on June 19. Inflation was pushed down by heating oil and air transport, while rents and some fruit and vegetable costs rose, the government agency said Tuesday. The core gauge, which excludes fresh and seasonal products as well as energy, slowed to 0.5%. While President Martin Schlegel has said repeatedly that the economy may experience individual months of negative inflation, he's also cautioned as recently as last week that such outcomes won't necessarily trigger a central-bank reaction. 'Our focus is not on the current rate of inflation, but rather on price stability over the medium term,' he said last week. Fellow policymaker Petra Tschudin may face questions on the matter after a speech later Tuesday. A 25 basis-point cut is fully priced in for this month, following five prior steps totaling 150 basis points so far. That move would bring the interest rate to zero. Some economists even anticipate a return to negative borrowing costs, though only a minority expects that to come already at the upcoming meeting. Since the financial crisis of 2008, there were four periods where Swiss inflation was below zero for several months. The SNB targets a range of 0%-2%. Consumer-price growth in the surrounding euro area remains significantly stronger than in Switzerland, and is anticipated to have been 2% in May. Based on the European Union's harmonized measure, Swiss prices saw a drop of 0.2% in the period. --With assistance from Joel Rinneby, Kristian Siedenburg and Harumi Ichikura. (Adds chart.) YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To Will Small Business Owners Knock Down Trump's Mighty Tariffs? ©2025 Bloomberg L.P.
Bloomberg
27-05-2025
- Business
- Bloomberg
SNB's Schlegel Warns Against Kneejerk Rate Moves on Negative Price Data
Subscribe to Economics Daily for the latest news and analysis. The Swiss National Bank doesn't need to react to every monthly inflation reading even if it turns out to be negative, President Martin Schlegel said.
Reuters
27-05-2025
- Business
- Reuters
Swiss inflation could go negative, SNB focused on medium term, Schlegel says
BASEL, Switzerland, May 27 (Reuters) - Swiss inflation could enter negative territory in the coming months, but this will not necessarily trigger a reaction by the Swiss National Bank, SNB Chairman Martin Schlegel said on Tuesday. The SNB will not be guided by inflation data for individual months, but instead look at maintaining price stability over the medium term, Schlegel told an event in Basel. "Even negative inflation figures cannot be ruled out in the coming months," he said. "The SNB does not necessarily have to react to this. Our focus is not on the current rate of inflation, but rather on price stability over the medium term." Swiss inflation eased to 0% in April, at the bottom end of the SNB's 0-2% target range, which it calls price stability. The figure, the lowest reading for four years, has fuelled market expectations the SNB will cut its benchmark rate from the current 0.25% at its next monetary policy meeting on June 19. Markets currently price in a 75% probability the SNB will cut the rate 25 basis points to zero. They give a 25% chance the central bank will go for a 50 basis point cut to minus 0.25%. By focusing on the medium term rather than short term peaks and troughs, the SNB could act with a "steady hand" in deciding monetary policy, the SNB chairman said. However, the bank would not hesitate to act if necessary, he said, with the SNB's policy rate its main tool. Currency market interventions could also be an important instrument, he added. Schlegel also said trade uncertainties are currently high due to the tariff policies pursued by the U.S. government.
Mint
27-05-2025
- Business
- Mint
SNB Removed Chevron From US Portfolio on Environmental Concerns
The Swiss National Bank sold its entire stake in oil producer Chevron Corp. because it now considers investments in the stock to breach its portfolio guidelines, according to a person familiar with the matter. The central bank hasn't moved away from drilling companies in general, but specifically dropped Chevron because of environmental concerns that don't apply to other rivals, the person said. They declined to be identified discussing confidential matters. 'The SNB has not adjusted its investment policy,' but stands by its existing guidelines, according to an e-mailed statement. It declined to comment on specific investments. The central bank has 703 billion-franc in foreign currency reserves, amassed over the years through currency purchases to contain the strength of the franc. A quarter is held in equities. A portion of that is in the US, requiring disclosure of such holdings according to American securities rules. The SNB's disposal of a stake in Chevron that previously totaled $712 million was revealed in its latest filing this month. The share investments tend to mirror major indexes, and the SNB tries to be market-neutral. The central bank retains shares in other oil producers including Exxon Mobil Corp. and ConocoPhillips. Activists have been pressuring the SNB for years to stop holding stocks in businesses whose products foster climate change. A focal point for protests is the central bank's annual shareholder meeting. At the most recent one last month, protesters gathered in front of the venue with placards of President Martin Schlegel's face and the slogan 'burn, baby, burn.' At that event, Schlegel recited the institution's policy that it may not pursue climate targets with its portfolio because its mandate is solely focused on price stability. The central bank's investment guidelines prohibit purchasing stocks or bonds of companies that 'systematically cause severe environmental damage.' Producers of internationally condemned weapons, coal mining companies and systematically relevant banks are also excluded. This article was generated from an automated news agency feed without modifications to text.
Bloomberg
19-05-2025
- Business
- Bloomberg
Swiss Inflation Risks Falling Below Zero in Individual Months This Year, Schlegel Says
Takeaways NEW Subscribe to Economics Daily for the latest news and analysis. Switzerland's inflation rate may fall below zero at times in 2025, according to central bank chief Martin Schlegel.
