Housing Prices, ECB Decisions, and Fed Reports Shape the Financial Landscape
This week, domestic and global markets were abuzz with significant developments. On the local front, housing price data took center stage, while globally, the Federal Reserve’s minutes, Eurozone inflation figures, and the European Central Bank’s interest rate decisions were major talking points.
1. European Central Bank Holds Rates Steady
The European Central Bank (ECB) decided to keep its refinancing, deposit, and marginal lending rates unchanged at 4.25%, 3.75%, and 4.50%, respectively. The ECB reaffirmed its commitment to maintaining restrictive rates as long as necessary, noting that the level and duration of this stance would depend on incoming data. It also highlighted persistent price pressures in the Eurozone, predicting that headline inflation will remain above target until 2025.
2. Eurozone Inflation Aligns with Expectations
Eurostat released the final inflation data for June, revealing that the Eurozone’s monthly inflation rate was 0.2%, with the annual rate climbing to 2.5%.
3. Fed’s Beige Book Highlights Economic Activity
The Federal Reserve published the July edition of its “Beige Book,” reporting that economic activity in many regions had either declined or remained flat as the third quarter began.
4. Gold Hits Record High
On July 17, gold prices soared to a new high as investors grew more confident in predictions of a Fed rate cut this year and faced uncertainty over U.S. political stability.
5. Global Technical Issues Impact Banks and Airlines
Technical glitches affected airlines, banks, and the London Stock Exchange (LSE) worldwide. Microsoft Corp. also reported an outage in its online services. Turkey’s Minister of Transport and Infrastructure, Abdulkadir Uraloğlu, stated that the disruptions at airports and banks were not due to a cyberattack.
6. Real Decline in Housing Prices
According to the Central Bank of the Republic of Turkey (TCMB) Housing Price Index, housing prices saw a continued decrease in May. While prices increased annually by 45%, they fell by 14.9% in real terms. For seven consecutive months, housing price growth has lagged behind the Consumer Price Index (CPI).
7. Public Sector Austerity Package Passed
The Turkish Grand National Assembly (TBMM) approved a bill introducing new austerity measures for the public sector. The law, which will come into effect on January 1st, aims to enforce stricter budgetary controls.
Source: Bloomberght / Prepared by Irem Yildiz