Economy

roamer65

(37,537 posts) Sun Mar 16, 2025, 07:34 PM Mar 16

Swiss National Bank (SNB) expected to cut 25 bps this week, nearing ZIRP.

Expected to cut this week to bring their funds rate to .25 percent. Expectations are the SNB will reach zero funds rate later this year.

https://www.reuters.com/markets/europe/swiss-inflation-falls-lowest-nearly-four-years-2025-03-05/

2 replies

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Swiss National Bank (SNB) expected to cut 25 bps this week, nearing ZIRP. (Original Post) roamer65 Mar 16 OP

Borrow Swiss Francs and buy U.S. Treasuries with the money. Frasier Balzov Mar 16 #1

Dollar instability. roamer65 Mar 17 #2

Frasier Balzov

(4,196 posts)

1. Borrow Swiss Francs and buy U.S. Treasuries with the money.

Reply to roamer65 (Original post)

Sun Mar 16, 2025, 08:15 PM

Mar 16

That's the obvious play. What are the risks?

roamer65

(37,537 posts)

2. Dollar instability.

Reply to Frasier Balzov (Reply #1)

Mon Mar 17, 2025, 01:15 AM

Mar 17

The franc is a VERY stable currency because the Swiss run a very tight fiscal ship. When our interest rate cuts start in earnest, the franc will begin to significantly appreciate. The dollar depreciation will overwhelm any benefits of the interest rate differential.

I would definitely not use the franc as a carry trade currency.

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