Swiss Central Bank Governor: Inflation Outlook Highly Uncertain

Odaily Planet Daily News - Swiss Central Bank Governor Schlegel stated on Wednesday local time that the uncertainty surrounding Switzerland's inflation outlook is "quite high" and that close attention must be paid to whether the impact of the Middle East conflict triggers second-round effects on inflation. Schlegel noted that the rise in energy costs caused by the Middle East conflict is likely a supply shock. "However, we must closely monitor second-round effects. If we observe signs of second-round effects and excessively high inflation, central banks should act early and decisively," Schlegel said. Schlegel reviewed the Swiss Central Bank's latest monetary policy decision in March, when the central bank maintained its benchmark interest rate at zero while slightly raising this year's inflation forecast to 0.5%. He also pointed out that the Swiss Central Bank's latest projections indicate that inflation will remain within the target range of 0% to 2% through 2028. "However, it is clear that the uncertainty surrounding this inflation forecast is currently quite high. Therefore, given the Middle East conflict, our willingness to intervene in the foreign exchange market has increased," Schlegel stated.