May 2026

Following April, during which the negotiations between the U.S. and Iran were closely monitored, uncertainty persists due to the continued presence of U.S. military forces in the Strait of Hormuz and the failure of the parties to reach a mutual agreement. Data released in April indicated that orders brought forward due to the uncertainty had accelerated activity in the global manufacturing sector, while the effects of persistently high oil prices on global inflation started to be felt. However, major central banks have adopted a “wait-and-see” strategy at their April meetings. Trump’s planned visit to China on May 14–15, whether other parties will join the talks there, the fate of tariffs and trade restrictions -particularly in the technology sector- and the direction of developments in the Middle East due to China’s influence on Iran will be closely monitored. Additionally, whether the Fed will make any changes to its monetary policy in the new era beginning with Kevin Warsh’s chairmanship will be one of the key agenda items. Whether other central banks will tighten policy in response to rising inflationary pressures will also be closely monitored.

High global energy prices and uncertainties regarding the upcoming period continue to be significant factors for Türkiye’s inflation and current account outlook. A deterioration in expectations could create additional upward pressure on inflation as well. In this context, the CBRT, which kept funding cost at 40% throughout April, highlighted the importance of potential secondary effects of recent developments on the inflation outlook at its meeting on April 22. The CBRT’s second Inflation Report of the year, to be released on May 14, and the messages from the CBRT Governor will be closely monitored.