When will interest rates fall? Forecasts have arrived from two world-renowned banks

While the Central Bank of the Republic of Türkiye (TCMB) drew attention with interest rate cuts in late 2024 and early 2025, it raised the policy rate from 42.5 percent to 46 percent with a 350 basis point hike, contrary to expectations, at the Monetary Policy Committee (PPK) meeting on April 17, 2025. Following this surprise decision, the markets have turned their attention to the new interest rate decision to be announced on Thursday, June 19. The question of when interest rate cuts will begin remains uncertain for investors and economists.

WHEN WILL THE INTEREST RATE CUT COME?

US-based investment bank Morgan Stanley announced in its analysis of Türkiye's monetary policy that they could move their interest rate cut expectations from July to June. The bank stated that the Central Bank would not change its current inflation forecast range, but would maintain its tight stance to reach this target.

Morgan Stanley stated that if May inflation data comes in positively, the first interest rate cut step could even be taken at the June meeting. This means that the bank's interest rate cut expectation, which it previously projected for July, could be brought forward.

GOLDMAN SACHS: “FIRST EASING EXPECTED IN JULY”

Another major global investment bank, Goldman Sachs, took a different position, reporting that they do not expect any interest rate cuts from the Central Bank at the June meeting. The bank stated that the current monetary policy keeps growth at trend levels, but they do not expect the tight stance to suppress this momentum much further.

Goldman Sachs emphasized that it is more likely that monetary policy will be kept on hold at the June meeting, but that steps toward easing will be taken starting in July.

News Source: 12punto