SNB President Schlegel in July 2026: What the Speech Means for Mortgages

Appearances by the SNB President between regular interest rate decisions are closely watched on the Swiss capital market. On July 8, 2026, Martin Schlegel spoke before the Swiss Risk Association in Zurich, marking the first detailed status update after the June 18 rate decision. The title sounded unspectacular, “Current Economic Situation and Monetary Policy,” and so were the contents for the most part. Still, it is worth taking a look at individual passages, as they outline the environment in which SARON and fixed-rate mortgages are currently moving.

The Context: Increased Uncertainty, but No Acute Turning Point

Schlegel began his speech before the Swiss Risk Association with a review of the uncertainty that has been hovering over the world economy for years. After easing in the Middle East, energy and commodity prices have fallen again. Companies' supply situation remains slightly more difficult than before the pandemic, and consumer sentiment is subdued. For global economic growth, the SNB expects a temporary slowdown, without recession signals.

The tone was therefore not alarmist, but not relaxed either. For the domestic capital market, this means that the outlook for long-term interest rates remains intact. The ten-year government bond, the most important reference rate for fixed-rate mortgages, has been trading between 0.3 and 0.4 percent for weeks. There is no indication in the speech of any impetus for a significant increase.

Inflation: Rise Abroad, Calm at Home

Schlegel's look at price developments was more interesting. Inflation has risen again globally, but the increase is significantly smaller in Switzerland. Specifically, the SNB President cited values between 0.2 and 0.7 percent for the current and coming quarters, all within the National Bank's target range of zero to two percent. The medium-term inflationary pressure remains practically unchanged.

For mortgage borrowers, this is probably the most important message of the speech. As long as price dynamics in Switzerland remain controlled, the SNB has neither cause nor justification to raise the key interest rate again. The June figure for national inflation stood at 0.5 percent. This is in the lower end of the target range and far below the levels that triggered the rate hike cycle in 2022. The SARON, which represents banks’ refinancing costs, is likely to remain close to zero in this environment.

No New Signal for the Key Interest Rate

The monetary policy stance was clearly formulated: The key interest rate remains at zero percent. Schlegel reaffirmed that this means monetary policy is working expansively, because loans remain cheap and investments are promoted. A rate hike in the near future was not in prospect, nor was a further cut. The speech thus fits into the communication line that the SNB has followed since the spring: wait, observe, and react through the exchange rate if necessary.

This is precisely where the real emphasis lies. Schlegel repeated that the National Bank has “increased readiness” for foreign exchange interventions in order to counteract a rapid and excessive strengthening of the franc. The franc continues to be in demand as a safe haven in uncertain times, and appreciation pressure has increased. Without this measure, sharply falling import prices would further depress inflation and force a move into negative rates. Market participants interpreted the statement as confirmation that the SNB clearly prefers currency purchases to a renewed return to negative interest rates.

Consequences for the Choice Between SARON and Fixed-Rate Mortgages

Based on the speech, two observations can be made for the mortgage market. First, the SARON mortgage has retained its favorable position in an environment where the key interest rate will remain at zero for the foreseeable future. Anyone taking out SARON financing today effectively pays the base rate close to zero plus the bank’s margin. As long as the National Bank does not return to negative territory, the lower limit of refinancing costs is clearly defined.

Second, fixed-rate mortgages remain attractive at low levels, without any discernible time pressure. The ten-year swap rate, which determines the terms for fixed-rate mortgages, moves within a narrow range. A breakout to the upside would require a much stronger inflation dynamic or a monetary policy turnaround. Neither is evident in Schlegel's speech. Conversely, there is little to suggest a sharp decline either, because the ten-year yield already prices in future economic developments with moderate recovery.

What Mortgage Borrowers Should Keep in Mind in the Second Half of the Year

For the coming months, the speech draws attention to three points. The first is the development of energy and commodity prices. Should the Middle East conflict escalate again or a new geopolitical strain arise, imported prices would push up domestic inflation again. This could restrict the SNB’s room for maneuver.

The second point is the franc exchange rate. The National Bank now has a visible tool at the ready with its willingness to intervene, which it is likely to use before making a rate move. For rate expectations, this means additional cushioning against negative interest rates, but also a signal that the National Bank intends to stick to its strategy of not going below the lower rate bound again if possible.

The third point is the regular SNB interest rate decision in September 2026. By then, several inflation readings and an economic report from the State Secretariat for Economic Affairs are expected. Only the combination of actual price developments, the franc exchange rate, and growth dynamics will show whether the current zero-rate stance will be maintained or if the SNB needs to set new accents. Schlegel’s speech was therefore not a preview of the next session, but rather a confirmation of the current course.