In the world of finance and economics, central bank meetings often go unnoticed by the average person. But make no mistake—these meetings shape the global economic landscape. Recently, we’ve seen central banks from Switzerland to Australia engage in a wave of interest rate cuts, setting off what can only be described as a race to the bottom. Despite official reassurances that economies remain “strong and resilient,” the actions of these institutions tell a very different story.
The Swiss National Bank’s Early Warning
The Swiss National Bank (SNB) kicked off this latest round of monetary policy shifts by cutting interest rates by 25 basis points. This move, bringing the benchmark repo rate down from 0.5% to 0.25%, was not just a policy adjustment—it was a flashing warning sign. A year ago, the SNB shocked the world by cutting rates at a time when inflation fears dominated financial discussions. Back then, higher-for-longer interest rates were the consensus, and inflation was deemed the biggest threat.
However, the SNB recognized that inflation was actually moving in the opposite direction due to deteriorating global economic conditions. Their decision to cut rates early was not about stimulating growth; it was about acknowledging reality.
And now, a
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3 Responses
Hi Jarrid , just read your latest blog and I can say that I totally understood every word with no help from Chatgpt. I wanted to ask in the hangout study about why cutting interest rates and lowering inflation was not good for the economy, now I know why .
Thanks Jarrid
This was a nice write up!
Thank you for the simplicity in such a complex subject Jarrid.
GREAT read, thanks J!