Global Markets Struggle: Fed, Inflation, and the Davos Summit

Mixed Trends Continue in Global Markets

In global markets last week, increasing concerns about the independence of the U.S. Federal Reserve (Fed) and geopolitical tensions came to the forefront. This situation caused markets to exhibit a mixed trend.

Critical Data Expected in the U.S.

In the upcoming week, the growth data to be announced in the U.S. will catch the attention of investors. Data regarding the U.S. economy continues to have an impact on stock markets worldwide. The questioning of Fed Chairman Jerome Powell's independence has received support from former Fed officials and many central banks. Analysts point out that Powell's term will end in May, but the developments from the Fed this year could have a significant effect on investors.

Inflation Data and Interest Rate Expectations

Last week, inflation data in the U.S. showed that the Consumer Price Index (CPI) increased by 0.3% on a monthly basis, aligning with expectations at a year-on-year rate of 2.7%. However, the core inflation, estimated at 2.6% year-on-year, fell below expectations, creating the perception that price stability has not yet been fully achieved. This situation led investors to adopt a more cautious approach without expecting rate cuts from the Fed.

Davos Summit and Geopolitical Developments

The Davos summit organized by the World Economic Forum will be a significant platform for discussing developments in the global economy. It is expected that the statements made by leaders at the summit will have a considerable impact on the markets. Additionally, U.S. President Donald Trump's remarks regarding policies on Iran and the increase of trade tariffs are also on investors' minds.

Market Reflections

The 10-year treasury yield rose to 4.23%, reaching its highest level in recent years. The price of gold increased by 1.9% to $4,595 per ounce, while the price of silver traded at $90.1 with a weekly increase of 12.8%. The U.S. dollar index closed at 99.4, up 0.3%.

In Turkey, the Borsa İstanbul BIST 100 index closed at 12,668.52, with an increase of 3.83%, while investors will closely follow the monetary policy decisions to be made by the CBRT next week.