Return of Zero Interest Rate Policy as Swiss Central Bank Cuts Rates

BY Coindesk | ECONOMIC | 06/19/25 04:47 AM EDT By Omkar Godbole

A COVID-era feature that characterized the bull run in all corners of financial markets, including bitcoin BTC, has made a comeback in Switzerland, one of the most financial powerhouses of the world.

The Swiss National Bank (SNB) cut its interest rate to zero on Thursday, to counter falling inflation, appreciating Swiss franc (CHF) and economic uncertainty caused by President Donald Trump?s trade war.

The return to zero comes as tariffs threaten to deflate nations with trade surplus, such as Switzerland and China.

The latest rate cut is bank?s sixth straight move since it started reducing borrowing costs in March 2024.

The SNB?s return to zero may be a sign of things to come across Europe and other advanced nations. A broad based return to zero interest rate policy (ZIRP) may bode well for bitcoin.

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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