SNB’s Jordan: We cannot rule out further monetary policy tightening

Swiss National Bank (SNB) Chairman Thomas Jordan is addressing a press conference after the central bank announced a 25 basis points (bps) rate hike, raising the key rate to 1.75% in the June quarter.

Key takeaways

Marked decline in inflation is welcome.

Our monetary policy is significantly more restrictive than one year ago.

Monetary tightening has strengthened Swiss Franc, which has damped imported inflation.

Rise in rents will lead to higher domestic inflation.

Still, underlying inflation pressure has risen further.

We cannot rule out further monetary policy tightening.

There is a danger that inflation becoming entrenched above 2%.

Inflation caused by higher rents is not a reason for refraining from rate hikes in future.

Market reaction

USD/CHF has erased gains on the above comments, trading at 0.8930.