The Swiss National Bank once again cut interest rates, maintaining its leading position in the current global policy easing cycle.

The Swiss National Bank announced on Thursdaylowering the benchmark interest rate by 25 basis points to 1.25% for the second consecutive time in line with market expectations.It is in line with market expectations.

The Swiss National Bank said in a statement: "Potential inflationary pressures have fallen again compared to the previous quarter."

The Swiss National Bank said it willcontinue to closely monitor the development of inflation and adjust monetary policy if necessary to ensure that inflation remains within the range consistent with medium-term price stability.

Since the last monetary policy assessment, the inflation rate has slightly increased, reaching 1.4% in May. The high inflation rates of rents, travel services, and petroleum products are the main reasons for the inflation rate.

The bank also lowered its inflation forecast, expecting CPI growth to be controlled within the target range of 0-2% by 2026. The Swiss National Bank currently predicts an average inflation rate of 1.3% this year, 1.1% in 2025, and 1% in 2026.

Swiss GDP growth is expected to be around 1% this year, accelerating to around 1.5% by 2025. Unemployment rates are expected to rise slightly, and production capacity utilization is expected to decline slightly.

The Swiss National Bank said: "Looking ahead to the medium term, economic activity should gradually improve with the support of slightly stronger overseas demand."

Nomura Securities analysts described the possible rate cut in a report on June 14 as "a carefully weighed decision" and hinted that "the potential inflation momentum is still weak, which may enhance the Swiss National Bank's confidence that inflation is approaching the midpoint of its inflation target."

Will there be a third rate cut this year?

Switzerland became the first major economy to cut interest rates at the end of March, and the European Central Bank (ECB) followed suit earlier this month.

There are increasing doubts about whether there will be a third rate cut this year.

"The Swiss National Bank's inflation forecast indicates that "there are still some restrictive factors to be eliminated this year," which is a strong signal that it will cut rates again in September," said Kyle Chapman, a foreign exchange market analyst at Ballinger Group. "I expect the Swiss National Bank to cut rates for the third time in the next quarter, and if people still have great confidence in the restrictive level of monetary policy, there may be a fourth rate cut in December." He hinted that this prospect puts the franc in a "fragile position.""I expect the Swiss National Bank to cut rates for the third time in the next quarter, and if people still have great confidence in the restrictive level of monetary policy, there may be a fourth rate cut in December." He hinted that this prospect puts the franc in a "fragile position."""

Adrian Prettejohn, a macroeconomist at K2 Advisors, believes that the Swiss National Bank may not cut rates again this year because inflationary pressures are still quite high.

"Adrian Prettejohn, a macroeconomist at K2 Advisors, believes that the Swiss National Bank may not cut rates again this year because inflationary pressures are still quite high."The Swiss central bank has lowered its key interest rate for the second time in succession, from 1.5% to 1.25%. Labor compensation is increasing at a strong pace, while services inflation remains high, indicating that potential pressures have not weakened. In fact, although the Swiss central bank has slightly lowered its inflation forecasts for 2025 and 2026, the magnitude of the reduction is small and does not seem to reflect significant changes in its outlook.

After the announcement, the Swiss franc weakened, with the euro rising by about 0.4% against the Swiss franc, separating itself from the low point about four months before the decision; the U.S. dollar rose 0.67% against the Swiss franc to 0.89048.