Petra Tschudin, one of the three policymakers who run Swiss interest rates, said the Swiss National Bank is ready to take its key rate, its main interest rate, below zero if that is what it takes to keep inflation inside the 0% to 2% target range. She made her comments in an interview with Finanz und Wirtschaft published Friday, August 21, 2026.
"Should it become necessary to lower interest rates below zero to keep inflation between 0% and 2% in the medium term, then we'll do so," Tschudin said.
Negative interest rates flip normal banking. Banks usually earn interest on cash they park at a central bank, but below zero they pay to hold it instead.
The idea is to make cash a less comfortable place to sit. That can push banks to lend, which is one way to nudge inflation upward.
Central banks often cut rates when inflation is too low. Negative rates are an extreme version of that same move.
When central bankers hint at negative rates, it's a good time to grab the free Always Be Buying E-Book
Tschudin acknowledged that negative rates behave differently from the positive rates most people are used to. She said that difference matters but does not tie the bank's hands.
The SNB also avoids a common tool called forward guidance. That is when a central bank gives public hints about where rates are heading.
Tschudin argued that the strategy is difficult to apply in a small and open economy, since external factors can swiftly shift the outlook.
Bloomberg News reported last month that SNB officials expect to hold the key rate steady until 2027 ends unless fresh shocks arise. Economists' forecasts point the same way.
Then the government reported that second-quarter growth came in at five times the rate analysts expected. Pay is expected to keep climbing, and with no forward guidance, outsiders cannot tell whether those numbers changed the bank's thinking.
Tschudin is one of three SNB rate-setters, alongside President Martin Schlegel and Vice President Antoine Martin. Her responsibilities include the central bank's foreign-currency assets, banking operations, and digital applications.
For investors, the essential fact is that the SNB is not boxed in. Its main rate is at 0%, and one of its top officials has said negative rates are still a live option.
July inflation is running at 0.4%. That is inside the target range, but it sits close to the lower edge.
If the SNB ever acts, the first place you would notice would be the Swiss franc, and from there the effect could reach any fund with Swiss stocks or bonds. A central bank that refuses to promise where rates go next is harder to predict, and that uncertainty is something investors carry in the back of their minds.
If rates keep falling, let the Always Be Buying E-Book show you how to keep investing through it all