Switzerland's CPI fell by 0.1% year-on-year in May, and the market expects the central bank to cut interest rates by 25 basis points

According to Jin10 data, Switzerland's CPI fell by 0.1% year-on-year in May, marking the first negative value recorded since early 2021. The appreciation of the Swiss franc has led to a decline in the prices of imported goods, contributing negatively to overall prices.

The market has fully priced in a 25 basis point rate cut this month, and the benchmark interest rate will drop to zero. Some economists speculate that negative interest rate policy may be restored in the future, but most believe it will not be implemented at this meeting.

Swiss National Bank President Schlegel stated that negative inflation may occur in individual months, but short-term fluctuations may not trigger a policy response. He emphasized the importance of focusing on price stability in the medium term.