The Swiss National Bank unexpectedly cut its key interest rate Thursday, becoming the first central bank from a rich, advanced economy to make such a move since inflation rates began to ease from a postpandemic surge.

Central banks in many developed economies have been signaling over recent months that interest-rate cuts are on their way, and the SNB's decision will likely heighten speculation about the timing of other moves.

Federal Reserve officials confirmed they expect to cut interest rates three times this year, after the central bank held its benchmark rate on Wednesday.

Meanwhile, European Central Bank President Christine Lagarde indicated that the bank would lower its key interest rate in June if upcoming data on inflation and wages are in line with its projections. Norges Bank and the Bank of England are both expected to hold their respective interest rates later Thursday.

With inflation now well within the SNB's target range, the bank cut its key rate to 1.5% from 1.75%, where it had been since June. Inflation is now expected below 2% over the next few years, having been 1.2% in February, the SNB said.

Although its inflation rate was never close to the double-digit level of the neighboring eurozone, consumer prices in Switzerland picked up following Russia's full-scale invasion of Ukraine in 2022.

Source : Marketwatch