SNB’s Schlegel: Some negative inflation prints are possible this year

SNB Chairman Schlegel warned during European trading hours about a high possibility of negative inflation prints this year, stating that a few months of negative inflation wouldn't be a problem. These comments indicate a flexible approach by the SNB towards inflation, which is crucial for investors. The Swiss franc often reflects the SNB's interest rate trajectory; however, a potential shift towards negative inflation could impact monetary policy, possibly reducing the scope for further interest rate hikes. This could cause the Swiss franc to weaken in the short term. Market participants might concern themselves with the implications of Schlegel’s comments on the ongoing monetary tightening outlook, potentially leading to increased volatility in the FX market.