RE: Negative Swiss bond rates29 Jun 2025 19:08
Yes, investors are buying Swiss government bonds—even at very low or negative yields—because they expect the Swiss franc to appreciate relative to the US dollar. They're essentially willing to earn negative interest in Swiss francs because they believe the potential devaluation of the dollar outweighs the 3.73% yield currently offered by 2-year US Treasuries.
This interest rate differential implies that the market is pricing in an approximate 7.5% decline in the dollar versus the Swiss franc over the next two years, based on interest rate parity.
As the dollar declines in value, dollar-denominated assets tend to rise in price. And the Swiss franc isn't the only perceived safe haven—many investors, especially in Asia, are also turning to gold as a store of value.