Fed impact on global markets: All eyes in Turkey turn to the Inflation Report

The US Federal Reserve (Fed) cut its policy rate by 25 basis points yesterday in line with expectations, bringing the rate to the 4.50-4.75 percent range. 

This marks the Fed's second interest rate cut of the year, and global markets followed a mixed trend following the decision. In Turkey, investors have focused their attention on the 4th Inflation Report of the year, which will be presented by Central Bank of the Republic of Turkey (CBRT) Governor Fatih Karahan.

WILL EMPLOYMENT AND INFLATION TARGETS BE MET?

In its statement, the Fed emphasized that the US economy continues to expand at a solid pace, noting that there has been a general easing in the labor market and that the unemployment rate, while rising, remains at low levels. It was stated that inflation is moving toward the 2 percent target but remains high, and it was pointed out that the risks to employment and inflation targets are balanced.

Fed Chair Jerome Powell stated in his post-meeting press conference that the US presidential election would not affect monetary policy decisions and emphasized that he would not resign if President Donald Trump asked him to do so.

On the other hand, in the CBRT's 3rd Inflation Report meeting of the year, it was projected that inflation would decline to 38 percent by the end of 2024, while the forecasts for 2025 and 2026 were maintained at 14 percent and 9 percent, respectively.

LATEST STATUS OF THE DOLLAR EXCHANGE RATE BEFORE THE DECISION 

The Dollar/TL exchange rate closed at 34.2192 yesterday with a 0.1 percent increase, and is trading at 34.3240 in the interbank market today with a 0.3 percent increase.

News Source: 12punto