Swiss National Bank Policy Unchanged After Leadership Transition
The Swiss National Bank (SNB) is maintaining its dedication to keeping inflation low, despite recent changes in its leadership. This commitment was emphasized by Petra Tschudin, a governing board member, in a recent interview.
Key Points
- Leadership Transition: Martin Schlegel succeeded Thomas Jordan as chairman after Jordan's 12-year tenure.
- Policy Continuity: Tschudin affirmed that the SNB's core objectives, methods, and procedures remain consistent.
- Price Stability: The SNB's primary goal is to maintain annual inflation between 0% and 2%.
- Monetary Tools: The SNB will continue to utilize its existing "toolbox," including interventions in foreign currency markets, to achieve its inflation target.
Interest Rate Outlook
Market analysts anticipate that the SNB will likely implement interest rate cuts, potentially starting at its March 18 meeting. This expectation follows a decrease in Swiss inflation to 0.4% in January, the lowest level recorded since April 2021.
Tschudin indicated that a temporary deviation from the 0-2% inflation target would not be problematic, emphasizing the importance of achieving the desired inflation rate in the medium term.
Negative Interest Rates as a Policy Tool
Tschudin highlighted the potential utility of negative interest rates, a strategy previously employed by the SNB from December 2014 to September 2022.
Chairman Schlegel has also suggested that reintroducing negative rates could be considered, although he expressed a preference to avoid this path.
According to Tschudin, negative interest rates are crucial for a small, open economy like Switzerland, enabling the management of interest rate differentials even in a low-rate environment. She noted that negative rates could help mitigate excessive appreciation of the Swiss franc, which could decrease inflation by reducing import costs and negatively impacting exporters by making their products more expensive internationally.
Summary of SNB's Stance
In summary, the Swiss National Bank remains committed to its established monetary policy goals and is prepared to use a variety of tools, including potential negative interest rates, to maintain price stability and manage the Swiss franc's value.
</nKremlin Seeks Clarification on JD Vance Comment on Military Levers
The Kremlin has requested clarification from the United States regarding comments made by Vice President JD Vance about the potential use of military levers to encourage Russia to reach a peace agreement with Ukraine.
Vance's Remarks
In an interview with the Wall Street Journal prior to the Munich Security Conference, Vance suggested that the U.S. possesses both economic and military tools to influence Russia's decision-making regarding the conflict in Ukraine.
"There are economic tools of leverage, there are of course military tools of leverage" the U.S. could use against Putin, Vance said.
Kremlin's Response
Kremlin spokesman Dmitry Peskov stated that Moscow seeks further explanation of the reference to military levers, as such formulations had not been previously voiced. He expressed hope that additional clarification would be provided during upcoming contacts with the U.S.
U.S.-Russia Talks in Munich
President Donald Trump mentioned that U.S. and Russian officials were scheduled to meet in Munich, with Ukraine also invited to participate. However, Kyiv indicated that it did not anticipate holding talks with Russia in the city.
Peskov noted that it would take several days to establish diplomatic contacts with the U.S. regarding Ukraine and refrained from providing new details about peace efforts.
Russian Officials' Absence from Munich Security Conference
Russian Foreign Ministry spokeswoman Maria Zakharova announced that Russian officials would not attend the Munich Security Conference, accusing it of becoming a pro-Ukrainian event. However, it remained unclear whether Russian officials might still travel to Munich for meetings outside the conference venue with U.S. or other officials.
Concerns of Sideline Negotiations
Ukraine and its European allies have expressed concerns about potentially being sidelined in negotiations between the U.S. and Russia regarding the conflict.