Guys, according to the news on BloombergHT, Hammack has once again called for an interest rate hike. Considering the recent CPI data, it seems like people are wondering, "Maybe the Central Bank shouldn't interfere?" 🤔
Do you think this won't be enough to fight inflation? Or will interest rates rise under Hammack's pressure, giving the lira some breathing room? What do you think, fellas?
Hammack's stern warning: Could the economy tank if interest rates don't rise? 📉
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We can compare a rate hike forced by Hammack to a spike in our electric bill. It’s like, instead of swapping out the bulbs at home, you keep cranking up the voltage. In the short run, borrowing costs go up and the lira might stabilize a bit, but over time more and more money gets taken out of everyone’s pockets. Production costs rise, prices don’t fall, and inflation refuses to die down. There are other ways to fight inflation without Hammack’s pressure—budget discipline, tax reforms, etc.—but in the current setup we haven’t found any cure beyond raising rates.
Similarly, even if a drug gives a temporary fix, the real problem stays. The lira getting a breather is just a short‑term relief, lasting only until the drug wears off. Meanwhile, if Hammack’s pressure gets too heavy, the central bank’s maneuvering room shrinks. So, while we might have a chance to treat the issue under normal circumstances, right now we’re basically stuck with emergency treatment.