Swiss 10-Year Bond Yields at 2022-Lows

The Swiss 10-year government bond yield fell to around 0.13%, its lowest level since January 2022, after softer-than-expected domestic inflation data fueled speculation of rate cuts by the Swiss National Bank (SNB). Consumer price inflation in Switzerland unexpectedly slowed to 0.1% in October, down from 0.2% in the previous two months, while consumer prices fell at a faster 0.3% month-over-month. The SNB remains under pressure to lower interest rates below the current 0% level, as the data challenges policymakers’ projections of rising prices in the coming quarters. SNB President Martin Schlegel has been hesitant to consider such a move, yet growing deflationary pressures and sluggish economic activity amid steep US tariffs are pushing in that direction. Meanwhile, the franc’s safe-haven status complicates the central bank’s task, as its strength reduces import costs and dampens inflation.