Kaiyuan Macro: Swiss inflation rate is low, Swiss franc appreciation may prompt the Swiss National Bank to cut interest rates.

Adrian Prettejohn, a macroeconomist at Capital Economics, stated in a report that Switzerland's inflation rate remained at 0.1% in January, which might not deter the Swiss National Bank from lowering interest rates to below zero this year. He said, "We expect it to be below average expectations and to remain around zero for the rest of the year." He mentioned that goods inflation is expected to remain negative, wage growth is forecasted to slow down, and the previous decrease in mortgage reference rates will push down rental inflation. Additionally, Prettejohn mentioned that a large influx of safe-haven funds this year has pushed up the exchange rate of the Swiss Franc against the Euro, undermining the confidence of Swiss National Bank President Martin Schlegel in avoiding negative interest rates. He predicts that the Swiss National Bank will lower key interest rates in June, but it is also possible for an earlier rate cut in March.