Interest rate forecast

In June, bond markets will turn their attention to the upcoming central bank meetings. This applies to changes in interest rates on both government bonds and mortgage loans.

In mid-June, the U.S. Federal Reserve and the European Central Bank will discuss whether to continue raising interest rates. One week later – on 22 June – the governing board of the Swiss National Bank (SNB) meets to determine the Swiss key interest rate.

While headline inflation in Switzerland has fallen significantly, core inflation (excluding energy prices) remains stubbornly above the 2% mark. This will likely prompt the SNB to raise interest rates again by 0.25 percentage points to 1.75 percent, which we expect to be their peak rate. In the second half of the year, we expect SNB key interest rates to be stable, with a first interest rate cut in mid-2024.

The interest rate hike we forecast is already anticipated by the markets and should therefore have little impact on government bond yields and mortgage interest rates. In the longer term, we expect interest rates to fall slightly, if the focus of the markets shifts to the first key interest rate cuts. (Date 24 May 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.