Page 17 - Turkey Outlook 2023

cannot simply continuously rise or decline. Some turnarounds one way
or the other are a must.

The Fed’s balance sheet has ceased breaking records. However, a
sharp contraction is not visible. There are still too many dollars around.

A record $8.97 trillion was registered as of April 12. As of December 20,
the balance stood at $8.56 trillion.

The Reverse Repo (RRP) account (money supply that is parked back at
the Fed by banks) stood at $2.29 trillion as of December 28. A record
$2.43 trillion was registered on September 30.

The Treasury General Account (TGA) (money supply that is parked
back at the Fed by the government) stood at $460bn as of December
21.

The yield on 10-year US Treasury papers tested the 4.0%s in October
while the USD index (DXY) tested the 115s in September.

Thirty-year mortgage rates in the US tested the 7%s in November.

The US yield curve, meanwhile, remains inverted. The US switched to
positive GDP growth of 2.6% y/y in Q3.

On November 8, the midterm elections in the US were held. The
Democrats were expected to lose their majority in Congress.

However, the Republicans did not deliver; they failed to win over
enough of the electorate.

Currently, the Democrats have 51 seats in the 100-seat Senate versus
49 seats held by the Republicans (though one Democrat is set on
sitting as an independent). The Democrats also have the casting vote
of vice president Kamala Harris, who also heads the Senate.

Such a tiny majority, as shown during the previous Senate term, is not

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