Swiss Deflation Risk Rises, Stronger Franc Increases Pressure on Central Bank

Golden Ten Data reported on March 4 that the US financial website investinglive commented on Switzerland's February CPI data, stating that the overall inflation rate remains unchanged and continues to hover near the deflation zone. For the Swiss National Bank, a more unfavorable factor is that core inflation continues to slowly decline, now expected to drop to 0.4%. By comparison, core inflation in February 2025 is still around 0.9%. Although the downward process is rather slow, this trend continues to increase the risk of the Swiss economy falling back into deflation. On the positive side, the US-Iran conflict may somewhat push up price pressures. However, this also creates a dilemma: against the backdrop of geopolitical tensions, the Swiss franc has strengthened significantly, and the Swiss National Bank has had to intervene in the foreign exchange market this week.