SZ SNB Chairman Jordan Speaks

SNB'S CHAIRMAN JORDAN: THE WEAK EURO AREA IS HURTING DEMAND FOR SWISS EXPORTS.

SWISS NATIONAL BANK'S JORDAN: REASONS TO BELIEVE THE NATURAL RATE OF INTEREST HAS INCREASED OR MIGHT RISE Jordan: The natural rate of interest (r*) as a reference point for monetary policy - a practitioner's view Ladies and gentlemen I am delighted to be here today in Seoul to address such a distinguished audience. I would like to thank Governor Rhee for inviting me to give this keynote speech. The topic of this year’s Bank of Korea International Conference – ‘The Evolution of the Natural Interest Rate and Its Implications for the Global Economy’ – could not have come at a better time. Monetary tightening over the past two years has lifted policy rates and longerterm interest rates from their historical lows. There are reasons to believe that some of the structural drivers of real interest rates have also changed direction in recent years. A lively debate has emerged on whether real interest rates will return to their pre-pandemic levels, or whether they will remain higher because the natural rate of interest, r*, has increased.1 Over the past years, r* has become an important reference point for monetary policy. The difference between the real interest rate and r* gives a measure of a central bank’s monetary policy stance. Therefore, r* estimates help in evaluating different monetary policy options. However, the measurement of r* is subject to high uncertainty. Today I would like to focus mainly on how policymakers can nevertheless make use of r* estimates in practice. In the first part of my remarks, I will briefly review the developments in real interest rates over the past decades. I will then turn to the concept of r* itself. In the second part, I will discuss how policymakers can use r* in practice to assess the monetary policy stance, and in particular, how they can deal with the inherent uncertainty in r* estimates. Here I will draw especially on the Swiss National Bank’s experience.

SNB'S CHAIRMAN JORDAN: THE OUTLOOK FOR SWISS INFLATION IS NOW MUCH BETTER.

I am delighted to see you here today at the SNB’s General Meeting of Shareholders. A warm welcome to you all. This is already my thirteenth General Meeting as Chairman of the Governing Board, and also my last. It is therefore a particular honour and pleasure for me to be able to speak to you again here one more time. ‘The spectre of inflation is back’ – this was the sort of headline that was commonplace in the media from mid-2021 onwards, both in Switzerland and abroad. After years when it had been exceptionally low, inflation ...

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It is a great honour and pleasure for me to speak to you on this year’s ETH Day. Many citizens may not know that the Swiss Federal Institute of Technology (ETH) and the Swiss National Bank (SNB) have a related ‘origin story’. The years after 1848 saw the founding of one important federal institution after another in the fledgling Swiss Confederation. And the question of where those institutions should be sited triggered a cantonal tug-of-war. The wrangling over the ETH and the SNB took a particularly long time to resolve. Indeed, in ...