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Goldman Sachs see SNB hike cycle over, with balance sheet the focus ahead

  • Goldman Sachs estimate Swiss growth at +0.7% this year, and see no further SNB rate hikes this cycle.
  • As such, they "expect the SNB to use active balance sheet policies rather than hiking rates further to manage the rate differential going forward”
  • On rate differentials, they note that “Historically the SNB has maintained a spread to the ECB of -50bp and to the Fed of -150bp, which would suggest future tightening pressure for the SNB at its current policy rate of 1.75% if our ECB and Fed terminal rate forecasts [...] are right. Given the SNB’s balance sheet is still over 100% of Swiss GDP, this is likely still years away.”
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