The yield on the Swiss 10-year government bond hovered around 0.27%, retreating from its highest levels in more than a month, as global investors reassessed the outlook for Federal Reserve policy easing in light of weaker-than-expected US inflation data. Domestically, the latest inflation figures reinforced expectations that the Swiss National Bank (SNB) will maintain an accommodative stance for the foreseeable future.
Swiss consumer prices rose 0.1% year-on-year in January, unchanged from December and at the lower bound of the SNB’s 0%–2% price-stability range. SNB President Martin Schlegel recently indicated that the central bank is willing to tolerate brief periods of negative inflation, while keeping its focus firmly on medium-term objectives.
At the same time, safe-haven demand for Swiss government debt remained resilient despite elevated risk sentiment, underpinned in particular by growing concerns over the broader impact of artificial intelligence on the global economy.
