Daily Bulletin

Good morning. As expected, the Federal Reserve cut the target range for the federal funds rate by 25 basis points, lowering it from 4.25–4.50% to 4.00–4.25%. In their projections for the coming period, Fed policymakers foresee a lower policy rate, stronger growth and inflation, and a slightly declining unemployment rate path. Chair Powell emphasized in his remarks that decisions will be taken on a meeting-by-meeting basis, that there is no automatic or pre-set path of rate cuts, and that there are clear signs of deterioration in the labor market. It was also noteworthy that he described the inflationary impact of tariffs—previously labeled “uncertain”—as “short-lived and temporary.” Overall, we can say this was a Fed meeting broadly in line with expectations. While Wall Street saw some mild profit-taking after the Fed’s decision yesterday evening, U.S. and European futures and Asian equities are trading higher this morning. On Borsa Istanbul, the index continues to hold around 11,200. Supported by global risk appetite, we expect an extension toward the 11,250/11,300 resistance area, with the 11,500/12,000 region remaining the short-term target zone. Supports are at 11,000 and 10,850. Today’s agenda is relatively light. Domestically, the CBRT reserves and weekly foreign flow data will be monitored, while in the U.S., jobless claims and several growth-related indicators are on the docket. Turkey’s five-year CDS spreads continue to decline, currently priced at 239 basis points this morning. We expect this downward trend to persist, which should lend support to the XBANK Banking Index. With continued rate cuts from the MPC and further declines in CDS spreads, upward revisions to target prices may be seen.