Switzerland’s 10-year government bond yield held almost steady around 0.35%, as investors balanced safe-haven demand from escalating Middle East tensions with expectations of a steady monetary policy in 2026. The Swiss National Bank left its benchmark interest rate unchanged for the third meeting at 0%, trying to assess the economic impact of the Iran war and rising global oil prices. balancing low inflation against a strong franc, which threatens the inflation outlook due to its deflationary effect. Annual inflation remained persistently low at 0.1% in February, near the bottom of the SNB’s 0%-2% target. This gave the central bank little reason to act, especially since rising energy prices from the Middle East conflict are expected to be cushioned by the firm Swiss franc. The SNB revised its macroeconomic forecasts, expecting a more pronounced rise in inflation in the near term, and economists anticipate that it will maintain its current stance for the rest of the year.
