In retrospect, monetary policy in 2004 was shaped by the contrasting implications of short and long-term views. While the long-term perspective made a tightening of monetary policy appear desirable, uncertainties over the future course of the economy militated more in favour of a relaxed pace. The monetary policy stance adopted by the National Bank in 2004 was the result of having to strike a balance between these two considerations. On the one hand, the SNB’s interest rate decisions continued a very relaxed monetary policy that was designed to support the economy. On the other hand, however, they were the first steps towards a normalisation of the interest rate level.
