Our offering has 0.2% margin on Saron. That would most likely mean Oct-March(?) at around 1.2%, April-June at 0.95% and from July onward 0.7%. That’s averaged to around 1.0% over the next 12 months, so it would be better to do a 1Y fixed for that period. What’s beyond one year from now is obviously anyone’s guess, but maybe we go even further down… however my current thinking is that the “insurance premium” of a fixed term is relatively cheap whilst there is not much to be gained with a Saron, unless we end up in a 0% interest environment in the next 2-3 years.
We could well be back to near zero again very soon. Though I think for most people a 0.5% margin is probably the cheapest they can hope for (without a special employee deal for bank employees).
SNB has reduced the interest rates by 25 bps to 1.0% today. After watching the press conference, it sounds to me that they will likely do another 25 bps cut in December, as hinted multiple times (given inflation will stay low and the Swiss Franc strong). 5Y Swaps seem to have dropped a bit intraday as well.
Good for Swiss stocks. As it would make bonds even less attractive.
In addition -: Direct Real estate funds are already marketing that 2% yield on direct real estate is much better than bond yields. It’s funny how the comparison is made to bonds and not stocks
It was Jordan’s last day. Would be a bad message on last/first day of change of guards, even with 0.6% inflation must be a worry, but house not yet on fire to cut 50bp. The wording today pretty much guarantees a cut in Dec and likely again Mar’25, imho. Should see a strong ‘priced-in’ rate moves in coming weeks.
Do you all see a probability for a 2nd, 3rd inflation wave in the next few years due to the massive MMT globally and price this in to answer above question?
As per UBS article, they expect SARON to be favorable versus fixed term mortgages for longer term horizons. So it looks like fixed rate is like an insurance/ hedge and comes with a cost.
But somehow I think that while taking mortgages it could be beneficial to have some sort of fixed costs to help proper planning of cash flows.
A probability? Sure. I’m not so convinced we’re going there, though, seeing the money funnelled in the stock market. My guess is that it can absorb excess liquidity that then wouldn’t get converted in extra expenses.
I don’t foresee an important future wave of inflation but these things tend to come unexpectedly so I wouldn’t bet my wealth on that.
I already see a 0.7% extra VAT increase in 2026 to finance the 13th month AHV.
As of today, the SNB only expects a 0.7% inflation rate in 2026… probably a bit too low?
Fun story: My negotiated 10-year rate moved between 0.7 and 0.8% few years ago. Took my time, well, why would it move anywhere, if not down? Few months later, the rate was 3x as high. Took most analysts, economist, banks, whatever by suprise. Maybe even some members of this forum.
Bad timing, missed opportunity. Or rather, costly mistake.
1.5% isn’t that bad, could be less then 1% net, if you aren’t anchored on those past rates below 1%
I guess that’s the trade off. On the one hand you expect to pay more in the long run. But on the other, maybe this allows you to be more aggressive in your asset allocation, which in turn will improve expected returns.
By reading and partipating to this forum, you confirm you have read and agree with the disclaimer presented on http://www.mustachianpost.com/
En lisant et participant à ce forum, tu confirmes avoir lu et être d'accord avec l'avis de dégagement de responsabilité présenté sur http://www.mustachianpost.com/fr/
Durch das Lesen und die Teilnahme an diesem Forum bestätigst du, dass du den auf http://www.mustachianpost.com/de/ dargestellten Haftungsausschluss gelesen hast und damit einverstanden bist.
