Swiss 1970s Inflation Specter Seen in SNB’s Unlimited Sales

Swiss central bank President Philipp Hildebrand’s pledge to protect the economy with unlimited currency purchases may come at a higher cost than billions of francs: faster inflation.

Hildebrand’s decision risks flooding the financial system with cash and undermining the Swiss National Bank’s job of delivering price stability, said economists at Credit Suisse Group AG and Barclays Capital. While central banks around the globe are seeking to ward off a recession through additional stimulus or rate cuts, the franc’s ascent forced Swiss policy makers into measures that sparked a decade of surging inflation when last introduced in the 1970s.