SNB: September meeting preview - client feedback

Interest in SNB policy has picked up meaningfully. UBS expects the SNB to keep the policy rate at 0% on Thursday 24 September, in line with market pricing as of 18 September, as subdued domestic inflation pressures mean the SNB is not overly concerned about CHF weakness and is not in a rush to raise rates. That said, risks around the baseline call for a June 2027 hike are skewed towards an earlier move, potentially as soon as December and followed by a sequence of increases. A hike at this week's meeting is viewed as unlikely but cannot be ruled out given the SNB's history of surprising markets, and with markets pricing only around 0.2bp, such a move would be a large surprise. At the meeting UBS will watch: (1) the inflation forecast - any increase of the Q2 2029 end-point (currently 0.8%; UBS forecast 1%) to well above 1% would be a hawkish signal; (2) whether the SNB still characterises medium-term inflationary pressures as "virtually unchanged";