No need for negative SNB rates

Because of the US government shutdown, two reports were released at the same time, one for October last year and one for November. Not only was the data relatively stale – and therefore its relevance has been surpassed by more recent economic newsflow – but the information contained in the reports was also benign.

The reports confirmed that consumption trends remain robust whilst inflation looks to be sticky but stable a little above the Fed’s 2.0% target. After adjusting for inflation, personal consumption expenditures rose by 0.3% over the month of November and by 2.6% in the 12 months to end November, in line with the average over the previous six months.

Chart 1. PCE inflation

Source: https://www.bea.gov/. Data as at 21 January 2026.

If there were any potential signs of concern, they came in the accompanying inflation data. Both the headline and core PCE price indices rose by 2.8% in the year to end November and both have shown a slight increase over the past few months. The scale of the upward move is modest and is nothing to be concerned about. Nonetheless, the data warns against complacency in the battle against inflation and highlights the importance of remaining vigilant for any signs of tariff-price push though in the months ahead.

Overall, the data releases do nothing to change the view that the Fed will remain on hold when it meets next week, as explained in more detail in EFG’s Macro Flash Note “FOMC Preview: the Case for a January Pause” released on 22 January¹.
 

¹ https://www.efginternational.com/ch/insights/2026/fomc_preview_the_case_for_a_january_pause.html