In an environment characterised by serious economic uncertainties and record low inflation rates, it is natural to ponder conceptual questions with regard to monetary policy. With the objective of price stability met, has monetary policy passed its litmus test in a lasting way? To what extent can and should monetary policy be economic policy as well? Are asset-price bubbles a real or only presumed challenge for monetary policy? What are the risks for deflation in Switzerland? The current outlook is strongly influenced by great uncertainties. The chief reasons are the unrelenting economic slump in Europe and geopolitical risks. These risks, along with the associated exchange rate risks, are hard to gauge. Switzerland is not likely to return to its potential growth path until some time during 2004.