Category: Economy

Recently, the Swiss National Bank (SNB) unexpectedly cut its main policy rate by 0.25 percentage points to 1.5%, citing projections that national inflation will likely remain under 2% in the coming years.

Contrary to expectations from economists surveyed by Reuters, who anticipated the bank would maintain rates at 1.75%, the SNB’s decision came as a surprise. The bank explained, “Inflation has been below 2% for some months now, aligning with what the SNB considers price stability. Our new forecast suggests inflation will continue to stay within this range for the foreseeable future.” In February, Swiss inflation further declined to 1.2%.

Additionally, the SNB has revised its inflation forecasts downwards. It now expects inflation to average 1.4% in 2024, a decrease from the previously estimated 1.9% in December, and to adjust the 2025 forecast to 1.2% from 1.6%. For 2026, the bank’s initial prediction is an average inflation rate of 1.1%.

Following this announcement, Capital Economics analysts predict that the SNB will implement two additional rate cuts this year, noting the bank’s dovish stance and the likelihood of inflation falling short of its forecasts. “We anticipate inflation to settle even below the SNB’s revised projections, maintaining around the current rate of 1.2% before dropping below 1.0% next year. Consequently, we expect rate cuts in the September and December meetings, bringing the policy rate down to 1%, where it is likely to stay through 2025 and 2026,” according to a note from Capital Economics.

The upcoming September meeting is expected to be the final one overseen by SNB Chairman Thomas Jordan, who will retire at the end of the month after a 12-year tenure.

The SNB also provided an outlook on the Swiss economy, predicting “modest” growth in the upcoming quarters and anticipating a GDP increase of about 1% this year.

At the global level, the bank anticipates “moderate” economic growth in the next quarters, with inflation likely to decrease due in part to tight monetary policies.

Airbnb has announced a significant update to its policy on security devices within its listings, effectively prohibiting the use of indoor security cameras across all properties offered on the platform. This decision, driven by privacy concerns, marks a departure from the company’s previous stance, which permitted the use of cameras in shared spaces such as hallways and living rooms, provided they were disclosed in the property’s listing details.

The move to eliminate even these previously allowed cameras underscores Airbnb’s commitment to enhancing privacy for its users. “Our goal was to create new, clear rules that provide our community with greater clarity about what to expect on Airbnb,” explained Juniper Downs, Airbnb’s head of community policy and partnerships, in a statement. She highlighted that the policy adjustments were the result of consultations with hosts, guests, and privacy specialists, emphasizing the platform’s openness to ongoing feedback to ensure the regulations align with the needs of Airbnb’s diverse, global user base.

While Airbnb acknowledges that this policy change will likely affect only a limited number of listings, as the majority do not feature indoor cameras, the revision is part of a broader update that also touches on outdoor security cameras and devices such as noise decibel monitors. These must now be explicitly mentioned in the listings.

The policy shift has been met with approval from privacy advocates, including the Surveillance Technology Oversight Project (STOP). STOP’s executive director, Albert Fox Cahn, commended the initiative, stating, “No one should have to worry about being recorded in a rental, whether the bedroom, the living room, or a hall. Getting rid of these cameras is a clear win for privacy and safety, and we know that these recording devices are ripe for abuse.”

In the midst of this policy overhaul, Airbnb continues to experience robust demand, as evidenced by nearly doubling its share price since a low point in December 2022 and recording a historic 99 million bookings in its most recent quarter. The company, which has also engaged in stock purchases contributing to the price increase, is now embarking on a journey to “reinvent” itself over the coming years.

In 2023, American consumers accumulated an unprecedented level of credit card debt, surpassing the trillion-dollar mark. Luckily, this number is not as dire as it first seems to be.

Although there’s a noticeable increase in credit card debt in nominal terms, when adjusted for inflation, it’s almost 20% lower than its late 2008 peak, as per WalletHub’s analysis using data from the New York Fed. Economists believe Americans are well-prepared to manage their debt.

Russell Price, chief economist at Ameriprise Financial, explained to CNN, “Consumers still have a lot of money left over to be able to spend, so the credit card data is often misinterpreted. The dollar value of credit-card debt is at an all-time high, but so is population, employment and consumer income.”

He also highlighted that the data does not account for the approximately 55% of borrowers who settle their balances in full each month, a point also noted by the New York Fed.

Looking at the larger economic scene, the US job market remains robust, and wage increases are outpacing inflation. January saw the addition of 353,000 jobs, maintaining the unemployment rate at 3.7%. The stock market is stable, sentiment regarding the economy has notably improved recently, and holiday spending was robust.

This sustained job market vitality enables Americans to continue managing their debts, save money, and maintain spending levels.

Therefore, despite the upsurge in credit card debt and existing economic challenges, the overarching view suggests that Americans and their economy are, to date, resilient.