US President-elect Donald Trump's rhetoric on tariffs and geopolitical risks led global markets to mixed results last week. Trump nominated Scott Bessent for the Treasury Department and Brooke Rollins for the Agriculture Department. Bessent, who is widely respected as an international investor, geopolitical and economic strategist, is expected to focus on preserving the dollar's status as the world reserve currency.
US economy grew by 2.8% in the third quarter of the year, in line with the forecasts, thanks to increased consumer spending. The core personal consumption expenditures price index, which is considered as an inflation indicator by the US Federal Reserve (Fed), rose by 0.3% mom in October, the highest increase in the last six months.
Minutes of the Federal Open Market Committee (FOMC) meeting revealed that the Fed will maintain a cautious approach to monetary policy by not rushing to cut interest rates in the coming period. Officials discussed the possibility of suspending interest rate cuts in the absence of progress in reducing inflation. Analysts noted that uncertainties regarding the Fed's continued cautious stance in monetary policy and the repercussions of Trump's tariffs affected the risk appetite.
In S&P's report on the global economic outlook, the global economy is expected to start 2025 in a relatively good position, with the world economy expected to grow by 3.3% this year and 3.3% next year, while the US economy is expected to grow by 2.7% this year and 2.2% next year. The Fed is expected to cut interest rates by 25 basis points at the end of the year with a 66% probability.
In Borsa Istanbul, the BIST 100 index closed the week at 9,652.00 points with a weekly gain of 1.07 percent. The first estimate of GDP for the third quarter of 2024 increased by 2.1% compared to the same quarter of last year. The Central Bank of the Republic of Turkey (CBRT) stated that domestic demand slowed down and approached disinflation supportive levels. USD/TL closed the week at 34.6921, 0.5 percent above the previous close.
In the new week, manufacturing industry PMI, inflation, foreign trade balance and weekly money and banking statistics will be monitored. In the AA Finance Inflation Expectations Survey, it was estimated that the Consumer Price Index (CPI) increased by 1.98 percent in November. Economists' inflation expectations for November were 1.98 percent, while annual inflation was expected to decline to 46.71 percent. Technically, the resistance and support positions of the BIST 100 index are 9,700 and 9,800 points, respectively.
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