The Countdown in Markets Has Begun: Will Inflation Fall Below 1%?

As the June inflation data approaches, expectations in the markets are being reshaped. Investors are closely watching not only the monthly inflation rate but also how the announced data will affect the expectations for the monetary policy of the Central Bank of the Republic of Turkey.Recently, downward revisions in June inflation forecasts have been notable. Previously, the monthly inflation rate was expected to be around 1.5%, but recent assessments have also included rates below 1%.The slowdown in food prices and the relatively stable trend in energy prices are influencing the change in expectations. According to the data announced by the Istanbul Chamber of Commerce, retail prices in the city increased by 1.14% on a monthly basis in June.One of the most wondered topics in the markets is the impact of a low inflation figure on the Central Bank's monetary policy. Economists participating in the AA Finans Inflation Expectations Survey estimate that the Consumer Price Index (CPI) will increase by 1.04% in June.If the June inflation rate is realized below expectations, it is evaluated that the expectations for a rate cut may strengthen at the Monetary Policy Committee meeting to be held on July 23.The June inflation data is expected to not only reveal monthly price movements but also to guide expectations for monetary policy in the second half of the year. It is anticipated that the data will also affect expectations regarding credit interest rates, the stock market, and the foreign exchange market.