New data from Ankara reveals a deepening manufacturing slump and accelerating inflation, which is now influencing bets on U.S. monetary policy.
The S&P Global Turkey Manufacturing PMI fell to 45.7, the lowest since October 2025, driven by weaker demand and supply disruptions from regional conflicts. At the same time, the Consumer Price Index surged to 32.37% year-over-year, well above forecasts, while producer prices also jumped sharply.
The lira’s continued depreciation and Turkey’s involvement in Middle Eastern tensions-including aid to Gaza and criticism of Israel-are compounding these pressures.
On Polymarket, the probability of a Fed rate cut by the June 2026 meeting now sits at 4.5%, up slightly from 4% a day earlier. Traders see the Turkish inflation data as a sign that global price pressures may persist, reducing the case for an early pivot by the Federal Reserve.
Investors are now watching upcoming U.S. CPI and employment reports, along with Fed commentary, for further signals on the rate path.