SNB Keeps Policy Rate at 0% - 39% U.S. Tariffs Push 2026 Growth Below 1%

The Swiss National Bank left its policy rate at 0% on Thursday - still the lowest among big central banks - and flagged a hit to the economy from the 39% U.S. tariffs that Donald Trump imposed on Swiss exports in August. The decision was a pause after a run of easing that began in March 2024: this was the first meeting in seven where the SNB didn't cut again.

SNB officials noted the tariffs are biting into exporters, with Switzerland's machinery and watchmaking industries taking the brunt. Services, by contrast, have so far felt much less strain. The bank said the trade shock and the resulting uncertainty trim the outlook for 2026: growth is now projected at just under 1%, and unemployment is expected to edge higher.

Chairman Martin Schlegel reiterated the SNB's reluctance to return to negative rates - a policy used between December 2014 and September 2022 that raised alarms among savers and pension funds. He's kept the bar high for any move back below zero.

Inflation has also helped make the hold feasible: after dipping and even turning negative in May, consumer prices have drifted back into the SNB's 0-2% target band over the last quarter.

Timing matters. The SNB's call came a week after the U.S. Federal Reserve trimmed rates and signaled more easing might be on the way, while the European Central Bank left rates unchanged in September - effectively pausing its own cut cycle. Analysts pointed out another practical reason for the SNB's stance: the franc has been relatively steady against the euro, reducing pressure to adjust policy for exchange-rate reasons.

Bottom line: the SNB is holding the line at zero, wary of reviving negative rates and explicitly naming U.S. tariffs as a near-term drag on exports and investment. Growth trimmed to just under 1% for 2026 and a likely uptick in unemployment.