The Swiss National Bank (SNB) has taken a cautious step in the face of mounting global economic uncertainty, opting to keep its key interest rate at zero percent—the lowest among major central banks worldwide. This decision, announced on September 25, 2025, comes amid a swirl of challenges, most notably the recent imposition of steep U.S. tariffs on Swiss exports by President Donald Trump. The move, widely anticipated by market watchers and confirmed by a Reuters poll, marks a significant pause in the SNB’s monetary policy direction after more than a year of rate cuts designed to bolster the Swiss economy.
For the first time in seven meetings, the SNB has chosen not to reduce borrowing costs, ending a streak that began in March 2024. Since then, the central bank had been steadily trimming rates in an effort to stimulate economic activity as global uncertainties—including trade tensions and volatile markets—cast a shadow over Switzerland’s export-driven economy. According to Reuters, the recent uptick in inflation played a role in the decision to hold rates steady, suggesting that the Bank is weighing the risks of stoking inflation against the need to support growth.
"Inflationary pressure is virtually unchanged compared to the previous quarter. Monetary policy helps to keep inflation within the range consistent with price stability and supports economic development," the SNB said in its official statement, as reported by Freemalaysiatoday. This cautious tone reflects the Bank’s ongoing balancing act: fostering enough economic momentum to withstand external shocks, while guarding against the dangers of runaway prices.
The SNB’s decision comes at a particularly fraught moment for Switzerland. In August, U.S. President Donald Trump imposed a 39% tariff on Swiss goods exported to the United States—one of the highest duties levied under his administration’s global trade reset. The new import tax has sent ripples across Switzerland’s export sector, which counts the U.S. as one of its most important markets. According to Freemalaysiatoday, the tariff threatens to inflict major damage on the Swiss economy, raising the stakes for policymakers in Bern and Zurich.
Swiss National Bank governing board member Petra Tschudin did not mince words when describing the current climate. "The Swiss economic outlook has deteriorated due to significantly higher U.S. tariffs," she said in remarks prepared for a press conference following the SNB’s rates announcement. "The outlook for Switzerland remains uncertain. The main risks are U.S. trade policy and global economic developments." Tschudin’s comments underscore just how much the external environment—especially decisions made in Washington—now weighs on Swiss economic prospects.
For many Swiss businesses, the tariff shock comes as an unwelcome jolt after a period of relative stability. The United States has long been a dependable destination for Swiss exports, from precision machinery and pharmaceuticals to luxury watches and specialty chemicals. The sudden imposition of such a steep import duty, as part of President Trump’s wider effort to reset global trade relationships, has left exporters scrambling to assess the impact on sales, supply chains, and future investment plans.
The SNB’s decision to hold rates steady also reflects a broader trend among central banks grappling with the dual threats of inflation and economic slowdown. While Switzerland’s inflation rate has crept up slightly in recent months, SNB Chairman Martin Schlegel has made clear that there are “high hurdles” to reintroducing a negative interest rate—a policy tool last used from December 2014 to September 2022. That era of negative rates, while intended to stimulate lending and investment, sparked considerable anxiety among savers and pension funds, who saw their returns dwindle in an already low-yield environment.
"There are high hurdles to reintroducing a negative interest rate," Schlegel has repeatedly stated, according to Freemalaysiatoday. The Bank’s reluctance to revisit this controversial policy is understandable, given the backlash it provoked and the limited room it offers for further maneuvering. Instead, the SNB appears to be betting that holding the line at zero will provide enough support for the economy without risking new distortions in the financial system.
The timing of the SNB’s announcement also carries symbolic weight. It is the Bank’s first major monetary policy decision since President Trump’s tariff bombshell, and it signals to markets and policymakers alike that Switzerland is prepared to weather the storm—at least for now—without resorting to more aggressive monetary easing. The decision was closely watched not only in Switzerland, but also by international investors who view the SNB’s moves as a bellwether for broader trends in global finance.
The central bank’s statement emphasized its commitment to maintaining price stability and supporting economic development, even as it acknowledged the growing risks on the horizon. With inflationary pressures described as “virtually unchanged” from the previous quarter, the SNB faces a delicate task: ensuring that its policies neither stifle recovery nor let inflation spiral out of control. The Bank’s cautious approach reflects a recognition that the global economic landscape remains highly unpredictable, with trade tensions, geopolitical uncertainties, and shifting consumer demand all in play.
For ordinary Swiss citizens, the SNB’s decision may offer some reassurance that the central bank is acting prudently in turbulent times. The era of negative rates—while beneficial for some borrowers—was widely unpopular among savers, retirees, and those reliant on fixed incomes. By keeping rates at zero, the SNB is signaling that it values stability and predictability, even as it keeps a close eye on inflation and external shocks.
Yet, as Petra Tschudin and other officials have warned, the outlook remains far from certain. The main risks—U.S. trade policy and global economic developments—are largely beyond Switzerland’s control, leaving policymakers with limited options. Should the U.S. escalate tariffs further or global growth falter, the SNB may be forced to reconsider its stance and deploy additional measures to safeguard the economy.
For now, Switzerland finds itself at a crossroads, balancing the need to defend its export sector against the imperative to maintain monetary stability. The SNB’s decision to hold rates at zero is a clear signal that it is prepared to wait and watch, rather than act precipitously. As the global economic picture continues to evolve, all eyes will remain on the SNB and its next moves—because in today’s interconnected world, what happens in Zurich can have ripple effects far beyond Switzerland’s borders.