Switzerland’s economy has performed well in recent years. At the same time, it has faced an extremely strong currency, in large part resulting from safe-haven capital inflows. This has precipitated two years of mild deflation and posed a threat to activity in the Swiss economy. Accordingly, policy interest rates have been reduced essentially to zero. The minimum exchange rate (a cap on the value of the Swiss franc against the euro), adopted two years ago, has resulted in a very large expansion of the central bank’s balance sheet. House prices have been increasing strongly, especially in a number of hotspots, driven by low interest rates as well as supply constraints and robust demand, especially from recent immigrants. Despite macro-prudential tightening measures, the housing market has shown few signs of cooling. The minimum exchange rate remains in place as inflation is still zero, there are still risks of renewed safe-haven flows, and there is still some slack in the economy. The fiscal balance remains soundboth at the federal level and in most cantons, thanks to healthy economic growth and the debt-brake rule, which has restrained expenditure growth through the cycle.