Switzerland keeps interest rates at 0% — but markets are betting it can’t avoid the global hiking cycle much longer

Swiss flag is pictured at the Harbor in Geneva, Switzerland, March 13, 2024. Denis Balibouse | ReutersSwitzerland's central bank kept its key interest rate at 0% on Thursday, defying the tightening cycle that has begun among many of its major peers.But market watchers say it's only a matter of time before it's forced into raising rates.Thursday's decision marked a divergence from policy decisions by the banks of Switzerland's major trading partners: the European Central Bank, the U.S. Federal Reserve and the Bank of Japan, which have all begun raising interest rates to ward off rising inflationThe central banks of Canada and the U.K., also major trading partners, are expected to follow suit later this year.The unique Swiss economy has kept it somewhat insulated from the inflationary surge seen in neighboring nations and economic peers. In August, Switzerland's annual inflation rate ticked up to 0.8%, pushed higher due to rising gasoline, diesel and heating oil costs — but it's a far cry from levels seen in the U.S., U.K. and euro zone.Their respective central banks have inflation targets of 2%, while the SNB's objective is to keep inflation between 0% and 2%. The SNB is widely expe...