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Qatar Central Bank (QCB) decided to reduce the current interest rates for deposits, lending and repo by 0.25% or 25 basis points (bps).The new rates will take effect on September 18, QCB noted.Qatar Central Bank’s deposit rate (QCBDR) will now be 4.35%, lending rate (QCBLR) 4.85% and repo rate (QCBRR) 4.60%.In a statement, QCB said the rate cut followed its “assessment of the current monetary policy of the State of Qatar.

Qatar National Bank (QNB) predicted that upcoming US Federal Reserve interest-rate decisions could lead to a mild stagflation scenario, where growth slows while inflation remains above target. In its weekly report, QNB noted that the current US administration has clearly focused on monetary policy and has urged the Federal Reserve to deliver large rate cuts and adopt a more flexible stance. The report explained that monetary policy decisions are normally based on forecasts of key macroeconomic variables and a careful analysis of how interest-rate changes affect economic activity and prices, with the Federal Open Market Committee typically carrying out this process through extensive technical deliberations free from political pressure. The bank observed that new economic trends has unsettled financial markets, causing significant volatility as investors try to determine the appropriate level of interest rates for pricing assets in the new macroeconomic environment. US interest rates and Treasury yields were said to provide important information on macroeconomic expectations, particularly through the real yield curve (the gap between yields on 10-year and 2-year Treasury Inflation-Protected Securities). A wider gap indicates expectations of weaker short-term growth relative to the long term. This gap has widened in 2025 even though long-term real yields have remained stable, suggesting that longer-term growth expectations have not changed while near-term activity is expected to weaken. Recent US labor-market data were highlighted as evidence of this slowdown, showing slower job creation and a gradual rise in unemployment in recent months. Consensus forecasts for real GDP growth have also been revised downward, with expectations for 2025 and 2026 reduced by about 0.5 percentage points to 1.5% and 1.7% respectively, levels approaching the weakest annual growth since the post-COVID recession. The report stressed that real interest rates remain highly restrictive. With the federal funds rate upper bound at 4.5% and inflation at roughly 2.7%, the real rate is close to 1.8%, well above the estimated neutral rate of roughly 0.5-1.0 percentage points. QNB argued that current rates are overly tight and need adjustment to avoid a sharp growth slowdown. Short-term Treasury yields were described as closely tracking market expectations for the Fed's policy path. The two-year Treasury yield has fallen about 60 basis points this year (from a January peak of 4.40% to roughly 3.80%) signaling expectations of a substantial rate-cutting cycle. Markets now anticipate two 25-basis-point cuts by the end of 2025, followed by additional reductions through 2026, which would bring the policy rate down to around 3% by the end of that year. QNB concluded that these indicators point to a moderate stagflationary environment, with inflation staying above the Fed's 2% target even as growth weakens. Members of the Federal Open Market Committee were reported to have acknowledged a shift in the balance of risks toward slower growth, with markets expecting a policy-easing cycle that lowers the federal funds rate to roughly 3% by the end of 2026.

Turkish inflation came in higher than expected in August, at nearly 33% annually and more than 2% on a monthly basis, readings that are likely to slow the central bank's plans to cut interest rates as it also weighs stronger economic growth.Annual consumer price inflation stood at 32.95% last month, official data showed on Wednesday, above a Reuters poll estimate of 32.6%. It was up 2.04% on a monthly basis.In further evidence that consumer demand remains strong despite the effects of prolonged monetary tightening, separate data on Monday had shown that Turkiye's economy grew by 4.8% in the second quarter, above expectations.The data flurry comes at a jittery time for investors in Turkiye. A court on Tuesday ousted the Istanbul provincial head of the main opposition Republican People's Party (CHP), dealing a fresh judicial blow to opponents of President Tayyip Erdogan and triggering sharp falls in Turkish share and bond markets.According to a poll conducted in July, economists had expected the central bank to cut its policy rate to 36% by year-end, or some 700 basis points from the current 43%. However the latest inflation and GDP data could cause it to slow the pace of the easing, analysts said."Looking ahead to the central bank's September 11 meeting, we expect the market's current consensus for a 300bps rate cut to moderate towards 200-250bps," Oyak Securities said in a note to clients on Wednesday.In July, the central bank cut the policy rate by 300 basis points, relaunching an easing cycle paused in March, and it promised to use all policy tools in the event of a significant and persistent deterioration in inflation."After Wednesday's GDP growth data and today's inflation data, the probability of the central bank cutting rates by 300 basis points in September has become very low," Hakan Kara, a former central bank chief economist now on the faculty at Bilkent University in Ankara, said on X.The monthly inflation reading for August of 2.04% was affected by higher food, education, and housing prices, as well as the continued impact of a mid-year update of taxes on tobacco and fuel items.In July, CPI inflation stood at 33.52% on an annual basis, while the monthly reading was 2.06%.In the Reuters poll, the monthly inflation rate for August had been expected to come in at 1.8%.The domestic producer price index rose 2.48% month-on-month in August for an annual rise of 25.16%, the data showed.Inflation is seen slowing to 30% at the end of this year according to the poll median, higher than the central bank forecast range of 25%-29%.

Turkiye’s economic growth remained resilient in the second quarter despite an emergency interest-rate hike by the central bank in March.Gross domestic product expanded 1.6% on a quarterly basis, up from a revised 0.7% in the preceding three-month period when adjusted for seasonality and working days, Turkiye’s statistics office said on Monday. The median estimate in a Bloomberg survey of economists projected an expansion of 0.6%.The economy grew 4.8% annually, compared with the median estimate of 4.1% in the survey and a revised 2.3% in the preceding quarter. The acceleration was largely down to the higher number of working days Turkiye had this year compared to 2024, QNB Turkiye economists led by Erkin Isik said in a research note ahead of the data release.The surprise boost came after the Turkish central bank raised interest rates in an unscheduled meeting in March to mitigate the market fallout following the jailing of a prominent opposition politician, reversing a cycle of rate cuts it had just begun. Even so, domestic demand climbed at the fastest pace in more than a year, leading the surge in annual growth. The central bank resumed its cuts in July, lowering the main policy rate to 43% from 46%.Spending by households, which is the main driver of Turkiye’s economy, rose 5.1%, the highest rate since the first quarter of 2024, Turkstat said.“On the surface, Turkiye’s especially strong growth data for the second quarter could be seen as reason to derail the central bank’s easing path. But activity is likely to post slower gains ahead and we maintain our call for rate cuts at all remaining meetings this year amid falling inflation,” says Selva Bahar Baziki, economist, Bloomberg Economics.“Today’s figures provide worrying evidence that domestic demand is too strong, which may prevent the current account deficit from narrowing further and inflation from falling as quickly as policymakers want,” Capital Economics’ chief emerging markets economist William Jackson said in a note. Though August inflation figures, which will be released on Wednesday, will give a better sense of that, Monday’s GDP report suggests the central bank “will not lower interest rates as quickly as we currently expect,” he said. Jackson currently sees the main policy rate reduced to 37% at the end of the year.Gross fixed capital formation, a measure of investments by businesses, soared by nearly 9% in the second quarter from a year earlier, while exports of goods and services increased by 1.7% from a year earlier, and up from 0.1% the prior quarter.The lira was little changed after the data release, trading 0.1% higher at 41.1182 per the US dollar at 10.57am in Istanbul.Monday’s release marks the first time Turkstat published revised growth data, which the agency said was carried out for better compliance with international peers.

European stocks edged lower on Friday as investors awaited key eurozone indicators and a US inflation report for signals on the timing of potential US interest rate cuts.The pan-european stock index slipped 0.2% to 552.41 points, putting it on track for its first weekly loss in a month.Markets broadly expect the US Federal Reserve to begin cutting rates in September, with traders closely monitoring upcoming economic data for confirmation of that outlook.