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Swiss central bank cuts interest rates to zero

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Swiss central bank cuts interest rates to zero

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The Swiss National Bank has cut interest rates by a quarter point to zero but did not go so far as negative rates, as it battles to restrain its currency, which has surged on global trade tensions. 

It is the first time that the Alpine country, which is one of the few globally to experiment with negative rates, has an interest rate of zero as it tackles lagging inflation and a surging Swiss franc, a haven currency that investors have bought up amid US President Donald Trump’s trade war.

The cut comes after annual inflation in Switzerland dipped to minus 0.1 per cent in May, the first negative reading in four years. The appreciating Swiss franc — up 10 per cent against the dollar this year — has slashed the cost of imports, dragging down consumer prices.

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The Swiss franc strengthened after Thursday’s expected cut, with the dollar down 0.2 per cent against the franc by afternoon trading at SFr0.817.

A minority of traders had been betting on a larger, half-point cut, according to levels implied by the swaps markets. The franc’s rally after Thursday’s decision was prompted by those bets being “unwound”, said analysts at BBH.

SNB chair Martin Schlegel said at a press conference that the bank would “not take a decision to go negative lightly”. The central bank would also have to take into account the interests of savers, pension funds and others, he said.

Traders slightly trimmed their bets on further rate cuts after Schlegel’s remarks, and were putting a roughly 60 per cent chance that the SNB will cut again to minus 0.25 per cent by March next year.

Switzerland’s two-year government bond yields, which are sensitive to movements in rate expectations, rose 0.09 percentage points to minus 0.10 per cent.

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The SNB has also repeatedly flagged financial stability risks from soaring valuations for Swiss property in a lower interest rate environment.

Schlegel did not, however, rule out a move into negative territory, with global trade turmoil possibly forcing the bank down that path in the months ahead.

“It sounds like they are going to play it by ear, which slightly dents market conviction on negative rates,” said Francesco Pesole, an FX strategist at ING.

The so-called Swissie’s sharp rise this year has complicated policymaking. The SNB is attempting to ease pressure without triggering accusations of currency manipulation from the US, which placed Switzerland on a watchlist during Trump’s first term. Analysts say rate cuts are a diplomatically safer route than direct FX intervention. 

The SNB’s decision contrasts with the Federal Reserve’s continued wait-and-see approach. The Bank of England also held rates at 4.25 per cent at its latest meeting.

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However, Norway’s central bank unexpectedly cut borrowing costs on Thursday, loosening monetary policy for the first time since the start of the Covid-19 pandemic. The strength of the economy in western Europe’s largest oil and gas producer had led it to keep rates higher than nearly all its neighbours, including Sweden’s Riksbank and the European Central Bank. But Norges Bank decided that the inflation outlook was subdued enough that it could cut rates by a quarter point to 4.25 per cent. 

Switzerland first introduced negative interest rates in December 2014, when the SNB set the deposit rate at minus 0.25 per cent to stem the franc’s appreciation amid safe-haven inflows.

The SNB at one stage pushed the rate down to minus 0.75 per cent, the lowest level in the world. The policy remained in place for more than seven years, also making it one of the world’s longest negative rate periods until it exited it in 2022. 

Thursday’s cut creates a potentially tricky situation for Swiss banks. They no longer earn interest on their reserves with the SNB but theoretically have less justification to pass that cost on to customers.

Daniel Kalt, chief economist at UBS, the country’s largest bank, said zero per cent was probably the most difficult scenario for banks.

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“In terms of pressure on net interest margins, it couldn’t be worse than with the situation we have today. With this, it is hard for banks to justify charging customers fees like they did during the previous period of negative interest rates,” Kalt said.

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Texas flood death toll rises as search continues for victims – UPI.com

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Texas flood death toll rises as search continues for victims – UPI.com

A young girl carries a stuffed bear during a vigil for those lost in the Texas floods at the “Wall of Hope” fence memorial in Kerrville, Texas, on Friday. Photo by Dustin Safranek/EPA

July 12 (UPI) — More than 2,100 searchers from a dozen Texas Counties, other states and Mexico are continuing recovery efforts to find more victims of the deadly flash flooding in central Texas.

The confirmed-deaths toll rose to 129 with 170 still missing after officials in Travis and Kerr counties reported the recovery of more bodies, USA Today reported.

Most of the dead, 103, were found in Kerr County, including 36 children and 67 adults.

Among those missing is Volunteer Fire Chief Michael Phillips, whose rescue vehicle was swept away when flash flooding struck Burnet County.

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Search crews later found the vehicle, but Phillips was not inside.

“Specialist teams and equipment continue to deploy into the search area and work themselves to exhaustion or until nightfall in the effort to find him,” the Burnet County Sheriff’s Office announced on Saturday, according to USA Today.

Many states and Mexico sent entire first responder teams, including Indiana, which deployed personnel from 15 fire and police departments to help the recovery effort, The New York Times reported.

Many volunteer groups also traveled to Kerr County, where most search efforts are focused.

“It’s overwhelming to see so many people come and help in the search,” Kerrville, Texas, resident Amy Vanlandingham told The New York Times.

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“This is our town,” she said. “I do it so I can sleep.”

The Guadalupe River’s flash flooding during the early morning hours of July 4 decimated several local camps and other popular visitor destinations on one of their busiest days of the year.

The bodies of victims likely are situated in debris fields located along more than 100 miles of narrow and shallow valleys along the Guadalupe River in the mostly rural area of Texas Hill Country.

President Donald Trump, first lady Melania Trump and others visited Kerr County on Friday to assess the situation and better gauge the need for federal assistance.

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'Helping every dang soul': Beloved camp director was among those lost in Texas flooding

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'Helping every dang soul': Beloved camp director was among those lost in Texas flooding

Just after the summer session ended in late June, Heart O’ the Hills camper Sydney Sutton sent this photo to the camp’s director, Jane Ragsdale, who was killed in the July 4 flooding in Kerr County, Texas.

Erika Sutton


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Erika Sutton

Jane Ragsdale spent her summers by the Guadalupe, the very river that killed her a week ago today in the catastrophic July Fourth flood. Mention her name in Kerrville, Texas, this week, and folks tend to do two things: tear up and smile.

“I mean I can’t tell you how many people, acquaintances of mine say, ‘My dear, dear friend died.’ And then they said, ‘Did you know Jane Ragsdale?’ and I say, ‘Yeah, I did,’ ” said Karen Taylor, who lives in nearby Hunt, Texas. For her, Ragsdale was West Kerr County personified.

“Everybody’s friendly here, but she embodied that friendliness and generosity and love for others. I just can’t imagine life without her,” Taylor said.

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Ragsdale, who was in her late 60s, did a lot of things, but she’s best known as the owner and director of Heart O’ the Hills camp for girls. She was born into the business.

Jane Ragsdale ran the Heart O’ the Hills camp for girls in Kerr County, Texas. The camp was between sessions when the deluge hit. The only person killed there was Ragsdale.

Jane Ragsdale ran the Heart O’ the Hills camp for girls in Kerr County, Texas. The camp was between sessions when the deluge hit. The only person killed there was Ragsdale.

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Kerrville Daily Times

Her family bought a boys’ camp, Camp Stewart in 1966, the year Ragsdale turned 9. They bought Heart O’ the Hills about a decade later. Ragsdale helped run it from the start. By 1988, she was in charge.

Unlike Camp Mystic, the girls camp where at least 27 perished when the deluge hit, Heart O’ the Hills was between sessions. The only person killed there was Ragsdale.

“I’ve never in my life met someone like Jane,” said Kathy Simmons, who was a good friend of Ragsdale’s.

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Simmons was at Heart O’ the Hills picking up her granddaughter just the week before the flood, on the last night the camp was open.

“We had a candlelight service on the river at 9 p.m., and it was so beautiful. There were prayers and there were songs,” Simmons said. “Jane always led the children in songs. And every one of those girls and those counselors absolutely idolized her.”

After Heart O' the Hills camper Sydney Sutton sent a photo of herself to Jane Ragsdale, the camp director wrote this letter back to Sydney.

After Heart O’ the Hills camper Sydney Sutton sent a photo of herself to Jane Ragsdale, the camp director wrote this letter back to Sydney.

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Erika Sutton

The summer camps on the Guadalupe River in Kerr County are institutions. Generations of girls and boys go through them, often forming life-long attachments. Simmons considered Ragsdale the heart and soul of her camp, both spiritual leader and educator.

“I mean, Jane taught these girls how to change a tire, how to ride a horse, how to swim, how to shoot a gun, archery, cooking. I mean, the necessities of life,” Simmons said.

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In the off-season, when she wasn’t running the camp, Ragsdale often traveled to Guatemala, where she volunteered as an interpreter and a project organizer. It was mission work she started doing when she was 19 and studying journalism. She was a badass. But she was also about the sweetest person in town.

“Jane was one of the most genuine, kind, honest people and very intelligent, very warm,” recalls Mindy Wendele, president and CEO of the Kerrville Area Chamber of Commerce. “She had a smile that you knew Jane Ragsdale was smiling at you.”

Wendele grew up with Ragsdale, who she describes as a real go-getter: deeply involved in the Chamber of Commerce, a board member of the local liberal arts college, a class leader in high school.

“Anytime that we were out with Jane and her family at Heart O’ the Hills, we had just a fabulous time, just fabulous memories out there,” Wendele said.

Now, with some of the camps and almost all of the riverfront in ruins, Kerr County faces a monumental clean-up and rebuilding effort.

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Another reason to miss Jane Ragsdale.

“Oh, she would be out there volunteering. She would be out there clearing property,” Simmons said. “She would have her boots on, her gloves on, she would be helping every dang soul that needed to be helped.”

So the flood took one of Kerr County’s most capable citizens, but Ragsdale’s influence on the community and the girls who came through Heart O’ the Hills camp is going to last a long time.

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Video: Clashes After Immigration Raid at California Cannabis Farm

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Video: Clashes After Immigration Raid at California Cannabis Farm

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Clashes After Immigration Raid at California Cannabis Farm

Federal agents fired crowd control munitions at protesters who blocked a road outside of the farm. Some demonstrators threw objects at the agents’ vehicles.

Please make a path for emergency vehicles or chemical munitions will be deployed.

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