Page 8 - TURKRptNov22

Federal Reserve
On September 21, the Fed’s open market committee hiked its policy rate by 75bp to 3.00-3.25%.
Updated projections of the US state central bank governors were also released. The governors now expect the policy rate to reach 4.25-4.50% in 2022, versus the expectation of 3.25-3.50% they gave in July.
The Fed has two scheduled meetings in the remainder of 2022, one on November 2 and the other on December 14. So, it seems a combination of one 50bp hike and one 75bp hike is currently on the cards.
As things stand, the market expects a 75bp increase on November 2.
Annual CPI inflation in the US declined to 8.2% in September from 8.3% in August (9.1% in June). As of October 27, the average gasoline price in the US was up 11% y/y to $3.76 per gallon (Record: $5.02 on June 14).
Tightening via both monetary and fiscal policies is marking out the current period. How long it can possibly last is under observation. The finance industry is already stepping forward with media campaigns on reversing the tightening.
30-year mortgage rates in the US hit 7.16% on October 26. November 8: Midterm elections in the US. Democrats are expected to
lose their majority in Congress.
The US is getting ready for a more powerful populist president (not Trump but someone else) in 2024.
Social tensions and wars across the globe lie ahead.
● Erdogan’s monetary policy remains totally out of control.
On October 3, official CPI inflation for September was released at 83% y/y, the highest figure recorded since the 85% posted in July 1998.
At 83%, Turkey stays in sixth place in the global inflation league.
Turkey’s official producer price (PPI) inflation, meanwhile, entered three-digit territory for the first time since March 1995, when it posted 144% y/y.
Sep: 152% (the highest posted since the 157% y/y reported for January 1995).
The ENAG research group annual inflation figure rose from 181% y/y in August to 186% y/y for September.
8 TURKEY Country Report November 2022 www.intellinews.com