The Swiss franc's recent weakening comes at a favorable moment for the economy, according to Marc Brütsch, chief economist at Swiss Life, who said the currency depreciation supports exporters just as tariff tensions ease.
"It opens a window in which the SNB could once again move the policy rate from zero upwards," Brütsch told Finews, noting that a further appreciation would have risked pushing industrial jobs abroad.
The Swiss National Bank has held its policy rate at zero percent, and while Swiss Life had previously expected no change until the end of 2027, the bank is reassessing that outlook. A rate increase would likely depend on European inflation solidifying and the European Central Bank delivering additional hikes. Brütsch stressed that any move should be framed as a normalization toward neutral monetary policy rather than a tightening cycle.
Negative interest rates, intensively discussed and partially priced in a short time ago, are no longer the base case. "In the medium term, there is a chance that the SNB could return to a more neutral rate zone within the next two years," Brütsch said, though he acknowledged they remain a tool available in a crisis scenario.
Swiss Life's inflation forecast calls for prices to remain within the SNB's 0–2 percent target band even if energy costs hold steady. The firm projects average inflation of 0.6 percent this year and 0.7 percent next year, ruling out a sustained overshoot above 2 percent.
Meanwhile, the Swiss labor market is exhibiting what Brütsch described as a "jobless recovery." Economic activity has posted several quarters of cyclical upturn near potential growth, yet employment has stagnated. Job openings are rising only slowly and unemployment has not declined meaningfully despite growth — an unusual pattern for this phase of the cycle that may reflect underlying structural forces.
Recent layoffs announced by several Swiss firms, including post-integration adjustments at Credit Suisse and UBS, are not, in his view, broad warning signals. Longer-term challenges include China's push into higher-value technology segments, which could eventually affect even Switzerland's specialized pharmaceutical sector.
Swiss economic resilience stems from highly competitive, hard-to-substitute exports and a flexible labor market able to adapt quickly to shocks. In a increasingly protectionist and multipolar world, international integration will grow ever more critical, Brütsch argued, noting that access to know-how and cutting-edge technology may depend less on price and more on network positioning.
On artificial intelligence, Brütsch pointed to U.S. research showing that firms advanced in AI deployment are creating new roles and occupations. In Switzerland, certain IT labor segments have already shifted since ChatGPT's launch. While the macro productivity boost remains elusive — echoing the Solow paradox observed with computers — the labor-market data are encouraging.
For financial markets, Brütsch highlighted a mispricing in long-term sovereign bond yields, particularly in the U.S. and France. Real rates in America are historically elevated even as long-term inflation expectations stay anchored. Fiscal concerns are justified but have been deferred for decades; an outright default is not imminent, he said.
