JPMorgan Expects TCMB to Kick Off Rate Cuts with a 150 Basis Point Decrease

Forex - JPMorgan (NYSE:JPM). They reported that they expect the Central Bank of the Republic of Turkey (CBRT) to begin its gradual interest rate cut process with a reduction of 150 basis points to 48.5% at the Monetary Policy Committee meeting on Thursday, December 26.

JPMorgan emphasized that "after five consecutive months of upward inflation surprises, it is likely that the CBRT will implement a measured interest rate cut this month," and mentioned that they anticipate three rate cuts of 150 basis points each from the CBRT in the first quarter of 2025.

Furthermore, JPMorgan indicated that they expect the CBRT to reduce rates by 200 basis points at each Monetary Policy Committee meeting starting from April and to lower the interest rate to 30% by the end of the year. However, they stated, "Since the risks to inflation are skewed upward, we see risks for higher interest rates for a longer duration in 2025."

Regarding inflation expectations, JP Morgan noted that they expect the headline Consumer Price Index (CPI) to rise by 1.5% month-on-month in December, and they foresee a decline in the CPI from 47.1% in November to 45.0% by the end of this year.

JPMorgan commented, "Although it is likely that the momentum of inflation will slow down in December, we expect an increase in wages, managed prices, and automatic tax hikes in the first quarter of 2025."