Interest rate forecast

After a real roller coaster ride in March, the bond market calmed down in April. Interest rates for Swiss government bonds moved sideways for all major maturities. The same applies to mortgage interest rates.

However, it is uncertain how long this calm period will last. The bond markets are still waiting to see which direction the note-issuing banks will ultimately take. Will they continue to raise their key interest rates sharply to break stubborn core inflation? This suggests a higher interest rate level. Or are the note-issuing banks afraid of a banking crisis and a recession? This implies a lower interest rate level.

In recent quarters, the markets have fluctuated between these two scenarios, leading to high volatility on the bond markets. Until the note-issuing banks signal that key interest rate hikes are coming to an end, uncertainty and hence volatility on the interest rate markets are likely to persist.

Further interest rate increases by the Swiss National Bank are already expected by the capital market, which means that government bond yields and mortgage interest rates will probably move sideways or slightly downward in the coming quarters. However, due to the high level of uncertainty, we are still seeing this interest rate trend across a broad spectrum.

(Status as per 20 April 2023)

Graphic instructions
Select individual interest rates to compare them and check their development by following the respective line with your cursor. 

Sources: Bloomberg, UBS Switzerland AG
Rates through the end of 2010 are based on Libor, and on SARON from 2011. The effective interest rate of the product is calculated using the margin + compounded SARON of the accounting period. When calculating the interest rate, the compounded SARON can never be less than zero.

Sources: Bloomberg,UBS Switzerland AG
Please note that the stated interest rate is in part a forecast and the actual interest may be higher or lower.