#CurrencyPairPrediction Inflation targeting is a monetary policy strategy where a central bank sets an explicit inflation rate (usually around 2%) as its goal and adjusts interest rates to steer actual inflation toward that target. Both the U.S. Federal Reserve and the Swiss National Bank (SNB) use inflation targeting, though with some differences in approach. Influence on USD/CHF: When the Federal Reserve raises rates to combat inflation (tight policy), the USD tends to strengthen against the CHF. Conversely, if the SNB is more aggressive in rate hikes or signals strong inflation control, the CHF strengthens. The relative stance of inflation targeting and interest rate policy between the two countries drives USD/CHF exchange rate volatility. A more credible and transparent inflation-targeting regime often leads to more stable currency expectations.