##table with other types of assets, an assumption that seems well supported in practice. 12 as both forward rate guidance and lsaps affect longer - term interest rates, the use of these tools allows monetary policy to be effective even when short - term interest rates are close to zero. however, the committee does not view these two tools as entirely equivalent. one reason is that we have much less experience with policies designed to operate on term premiums, as lsaps do. as a result, though a strong majority of fomc members believes that both the forward rate guidance and the lsaps are helping to support the recovery, we are somewhat less certain about the magnitudes of the effects on financial conditions and the economy of changes in the pace of purchases or in the accumulated stock of assets on the fed ’ s balance sheet. moreover, economists do not have as good an understanding as we would like of the factors determining term premiums ; indeed, as we saw earlier this year, hard - to - predict shifts in term premiums can be a source of significant volatility in interest rates and financial conditions. lsaps have other drawbacks not associated with forward rate guidance, including the risk of impairing the functioning of securities markets and the extra complexities for the fed of operating with a much larger balance sheet, although i see both of these issues as manageable. 13 in deciding to employ lsaps, the fomc has accordingly remained attentive to the possible costs and risks as well as to the efficacy of this less familiar tool, a point the committee has regularly noted in its post - meeting statements. of course, elevated unemployment, below - target inflation, lingering economic fragility, and the harmful effects of long - term unemployment on our society and economic potential also pose significant costs and risks, and the committee has, thus far, judged that the balance favors the use of lsaps. between november 2008 and june 2012, the fomc announced or extended a series of asset purchase programs, in each case specifying the expected quantities of assets to be acquired under the program. like the use of date - based forward guidance, announcing a program of predetermined size and duration has advantages and disadvantages. on the one hand, a fixed program size is straightforward to communicate ; on the other hand, a program of fixed size cannot so easily adapt to changes in the economic outlook and the consequent changes in the need for policy accommodation.

6 % for 2023, and 2. 0 % for 2024 and 2025 ( cf. table 1 ). without today ’ s policy rate increase, the inflation forecast would be even higher over the medium term. uncertainty regarding price developments going forward remains high, and there is above all the risk of elevated inflation becoming embedded. global economic outlook what is the economic outlook? the global economy hardly grew in the fourth quarter. nevertheless, q4 2022 and q1 2023 will likely be slightly less weak overall than expected in december. inflation is currently clearly above central banks ’ targets in many countries. against this background, numerous central banks have tightened their monetary policy further. the growth outlook for the global economy in the coming quarters remains subdued. at the same time, inflation is likely to remain elevated worldwide for the time being. over the medium term, however, it should return to more moderate levels, not least thanks to monetary policy and due to the economic slowdown. our scenario for the global economy is subject to significant risks, in particular due to the recent turmoil in the global financial sector. swiss economic outlook i now turn to the economic outlook for switzerland. gdp stagnated in the fourth quarter. for 2022 as a whole, gdp grew by 2. 1 %. the labour market remained robust, and overall production capacity has been well utilised. page 3 / 6 zurich, 23 march 2023 thomas jordan, martin schlegel and andrea m. maechler news conference despite the slight upturn in economic activity in recent months, growth is likely to remain modest for the rest of the year. subdued demand from abroad and the loss of purchasing power due to inflation are having a dampening effect. overall, swiss gdp is likely to increase by around 1 % this year. the forecast for switzerland, as for the global economy, is subject to high uncertainty. in the short term, the main risks are an economic downturn abroad and adverse effects of the turmoil in the global financial sector. monetary policy outlook ladies and gentlemen, allow me to return to our monetary policy. inflation is currently higher than we had expected in december, and inflationary pressure has risen again also due to second - round effects. the renewed increase in our policy rate is therefore necessary to ensure that inflation returns to the range consistent with price stability over the medium term. it cannot be ruled out that a further tightening of monetary policy will be necessary to ensure price stability. for some quarters now, we have indicated