10 For this reason, pursuing too low an inflation objective or otherwise tolerating persistently very low inflation would be inconsistent with the other leg of the FOMC’s mandate, to promote maximum employment. 11 An unexpected decline in inflation that is sizable and persistent can also be costly because it increases the debt burdens of borrowers.
Through following monetary targets, the Swiss National Bank was, for many decades, one of the most stability-oriented central banks in the world. Since the year 2000 monetary policy in Switzerland has been based mainly on inflation forecasts. In the short-run statistical time-series models play a role, whereas for the medium-run forecasts, structural VARs and structural macromodels, amongst others, are employed.