
The global economy continues to navigate a challenging landscape marked by persistent geopolitical risks, policy uncertainty in the United States, and sluggish growth in Europe.
While inflationary pressures have eased in many regions, risks remain that price levels could stay elevated in certain sectors, complicating monetary policy decisions. Factors such as volatile energy prices, ongoing supply chain disruptions, and geopolitical instability may contribute to higher-than-expected inflation, delaying an interest rate normalisation.
Central banks have responded by shifting towards more accommodative policies, with the Federal Reserve, the European Central Bank, and the Swiss National Bank all signalling a move towards quantitative easing. However, the timing and extent of further rate cuts remain uncertain. In December 2024, the Federal Reserve scaled back expectations for additional rate reductions, adopting a more cautious stance in response to stronger-than-expected economic data and persistent inflation in some sectors.
In this environment, investors have increasingly turned to real assets as a hedge against financial market volatility. Concerns over rising government debt and fiscal deficits have fuelled demand for alternative stores of value, including gold and, to some extent, cryptocurrencies. As inflation moderates and monetary policies adjust, real assets are regaining prominence as part of a long-term value preservation strategy.
Geopolitical conflicts continue to shape market conditions. The wars in Ukraine and the Middle East have contributed to heightened volatility, particularly in energy and commodity markets. In Europe, natural gas prices surged in early 2025 due to a halt in Russian gas exports via Ukraine, declining storage levels, and increased competition for LNG imports. With European gas inventories projected to end the winter at lower levels than previous years, energy price volatility remains a key economic concern.
Swiss Economic Trends
The Swiss economy demonstrated resilience in 2024, recording a growth rate of 1.0%, with projections pointing to 1.5% in 2025, supported by easing monetary conditions. Inflation has steadily declined, from 1.1% in August 2024 to 0.6% in December 2024, with forecasts suggesting it will remain at 0.6% in 2025. The labour market remains strong, though job growth has slowed, leading to a slight uptick in the unemployment rate.
Monetary policy in Switzerland is expected to continue easing, with the SARON rate projected to be 0.35% over the next 12 months. Additional rate cuts by the Swiss National Bank are anticipated, which could further support economic activity.
Despite these positive indicators, risks persist. A prolonged slowdown in Germany and France — two of Switzerland’s most important trading partners — could weigh on Swiss exports. Weaker industrial output and consumer spending in these markets may soften demand for Swiss goods and services. Additionally, the election of a new U.S. government has increased uncertainty over trade policy, with the possibility of tariff hikes on China, the EU, Mexico, and Canada. These measures could disrupt global trade flows, impact supply chains, and contribute to increased market volatility.
Contact
