U.S. inflation is still too high, Federal Reserve (Fed) Chair Kevin Warsh said Friday, suggesting the central bank may have to raise interest rates in the coming months to bring it down, a clearer signal than he had sent previously about his economic outlook.

In his first high-profile speech at the Fed’s annual conference in Jackson Hole, Wyoming, Warsh acknowledged that recent U.S. reports show that inflation has cooled a bit, but “they do not tell me that underlying trends have meaningfully improved.”

“We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed,” Warsh said. “Otherwise, we have work to do.”

Comments from the new Fed chair appeared to reassure Wall Street that fighting inflation remains the priority for the central bank. Warsh did not imply in his speech that a rate hike is imminent, but at the same time, he seemed to dismiss perceptions that inflation is not a threat.

He pointed to data showing that inflation remains stubbornly above the central bank’s 2% target. Warsh replaced Jerome Powell in late May after his predecessor’s term ended.

The U.S. stock market held steady after the speech, but expectations are building in the bond market for the Fed to hike interest rates. The yield on the two-year Treasury, which closely tracks expectations for what the Fed will do with its federal funds rate, moved from 4.22% to 4.30%, a sign that investors expect short-term yields to move higher.

Longer-term yields on 10-year and 30-year Treasuries were mostly flat, suggesting investors aren’t worried that higher rates will be needed for a long stretch of time to fight inflation.

Jon Faust, an economist at Johns Hopkins and a former adviser to Powell, said Warsh succeeded in conveying a tougher approach on inflation while, at the same time, avoiding the detailed guidance customary among his predecessors that he has disparaged.

“He found a way to convey that if necessary he would support raising rates, which is one thing people were concerned about,” Faust said.

Yet Michael Strain, director of economic policy studies at the American Enterprise Institute, said the Fed chair has talked tough on inflation before without hiking the Fed’s key rate. His Friday remarks don’t provide any clearer guidance on the timing of any Fed moves, he added.

The stakes were high for Warsh going into the speech, as questions swirl around Wall Street about his focus on fighting inflation.

Those concerns may have contributed to rising bond yields, which can increase the cost of borrowing for the government and everyone else. Yet Warsh has said he doesn’t want to provide what analysts call “forward guidance” about whether the Fed will hike or cut rates or stay on hold at upcoming meetings. He argues that it limits the Fed’s flexibility by committing it to a specific policy.

Yet some economists have argued that he could say more about his views on Fed policy without tipping his hand about future actions.

Warsh on Friday reiterated his skepticism about providing such guidance or even outlining his broad approach to interest-rate policy.

But he did suggest that interest rates currently aren’t restricting economic activity, pointing to robust business investment in AI equipment and infrastructure and strong consumer spending. As a rule of thumb, interest rates often need to be high enough to limit borrowing and spending to cool inflation.

The Fed next meets Sept. 15-16, and Warsh’s remarks don’t necessarily signal that the central bank will raise rates then. But his speech indicated that rates may not be high enough to bring inflation down to the Fed’s 2% target.

Warsh said inflation data “are more concerning” than trends in the job market, where the unemployment rate is low. He also argued that inflation is unlikely to move back to the target on its own.

Warsh noted that in the past year, 54% of goods and services tracked by the government have seen price increases of 3% or higher. While that is down from the pandemic peak, it is “well above” the 32% that saw such increases in the two decades before the pandemic.

Inflation cooled in June and July after spiking in May from soaring gas prices, yet it remains above the central bank’s target. According to the Fed’s preferred measure, it was 3.7% in July.

Warsh also sought to clear up some areas of confusion that arose after his remarks at a July 29 news conference. He specified that short-term interest rates are the “predominant tool” the Fed can use to lower inflation.

Previous Fed chairs have often used speeches at Jackson Hole to address broad questions about interest-rate policy and the economy, or to signal upcoming changes in their approach.

In 2022, with pandemic-era inflation having soared to 9.1%, Powell signaled the Fed would continue to sharply raise interest rates in a fight against runaway prices, and he acknowledged that such maneuvers would bring “pain” to consumers and businesses.

Wall Street investors now see the potential for a rate hike at the Fed’s next meeting Sept. 15-16 as basically a coin flip, according to futures pricing tracked by CME FedWatch, up from previous odds that put the chance of a hike at just one-third.

Questions about Warsh’s approach have intensified amid President Donald Trump’s continued calls for lower interest rates. While Trump has continued to defend Warsh, whom he appointed, the president has criticized other Fed officials for supporting higher rates.

Trump has also renewed his efforts to remove Fed Governor Lisa Cook, who was appointed by former President Joe Biden. Replacing Cook would enable Trump to appoint a majority of the seven-member board. Trump tried to fire her last year but was temporarily blocked by the Supreme Court.

Longer-term rates have steadily risen in recent weeks because of a range of factors, including burgeoning U.S. government deficits and outsize borrowing by tech firms building AI infrastructure.

The rate on the 30-year Treasury bond reached the highest level in 19 years last week, prompting an unusual effort by Treasury Secretary Scott Bessent to buy back bonds and push yields lower.

The Daily Sabah Newsletter

Keep up to date with what’s happening in Turkey,
it’s region and the world.

SIGN ME UP

You can unsubscribe at any time. By signing up you are agreeing to our Terms of Use and Privacy Policy.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Türkiye is launching a low-cost TL 250 billion ($5.18 billion) financing package aimed at supporting the manufacturing industry, Industry and Technology Minister Mehmet Fatih Kacır said Friday.

The package will provide small and medium-sized enterprises (SMEs) and large companies with loans of up to 36 months, including a grace period of up to six months, Kacır told an event in Istanbul.

The financing is intended to ease manufacturers’ access to financing while encouraging companies to preserve employment levels.

The announcement comes after President Recep Tayyip Erdoğan said late last month the government would expand the Investment Commitment Advance Loan Program to TL 750 billion from TL 500 billion.

This initiative is part of a larger TL 1 trillion financing package designed to support Turkish manufacturers, exporters, and industrial investment projects amidst tightening financial conditions.

Under the updated support framework, companies will be offered loans with both fixed and variable financing costs, Kacır said.

The maximum loan amount for large companies has been raised to TL 150 million from TL 50 million, while individual company limits will be determined in proportion to labor costs.

Financing cost as low as 25%

Fixed-rate loans under the program will carry an annual financing rate of 37%, while variable-rate loans will be priced at the Turkish Lira Overnight Reference Rate (TLREF) plus 1 percentage point, according to Kacır.

The government will cover 12 percentage points of the financing cost for companies that maintain their average employment levels from January to June during the July to December period.

As a result, the annual financing cost of fixed-rate loans could fall to as low as 25%, Kacır said.

The program will also provide credit guarantee support for SMEs.

Companies will be able to apply for the financing package starting Tuesday.

“We are living in a time when global balances are being redefined and geopolitical tensions are accelerating the race for economic and technological supremacy,” Kacır said.

In a period marked by rising protectionist barriers, reshaped supply chains, and geopolitical tensions testing the global economy, Kacır said Türkiye stands out for its stability and is increasingly solidifying its position as a hub for production and investment.

Kacır stressed that the government’s policies and the efforts of industrialists have helped the industrial production index increase 3.5-fold over the past 23 years.

“We are a leading European manufacturer in many sectors, ranging from solar panels to commercial vehicles, and from home appliances to iron and steel,” he noted.

The goal now, Kacır says, is to increase the size of Türkiye’s planned industrial zones from the current 160,000 hectares to 350,000 hectares by 2030 and to boost manufacturing exports to $400 billion.

According to the minister, Türkiye is the country that can competitively export the widest variety of products to the greatest number of countries across a broad region stretching from China to Central Europe.

“Thanks to our production-oriented economic model, our national income has risen from $238 billion to $1.6 trillion,” he said.

The Daily Sabah Newsletter

Keep up to date with what’s happening in Turkey,
it’s region and the world.

SIGN ME UP

You can unsubscribe at any time. By signing up you are agreeing to our Terms of Use and Privacy Policy.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Türkiye is working to strengthen economic and commercial relations with Syria while expanding cooperation to support Aleppo’s reconstruction and economic development, Turkish Trade Minister Omer Bolat said Friday.

Bolat’s remarks came in Shaykh Najjar Industrial City in Aleppo, where he arrived for the first time since a visit in late 2004 with President Recep Tayyip Erdoğan.

In the city just 50 kilometers south of the Turkish border, Bolat met industrialists and business representatives and examined production activities, industrial infrastructure and commercial opportunities.

The minister emphasized Aleppo’s central role in reviving the Syrian economy.

Earlier this week, Bolat visited Damascus with a business delegation and held talks with top Syrian officials.

Commercial ties between Türkiye and Syria gained momentum after the ouster of longtime dictator Bashar Assad in late 2024.

Ankara was the main backer of the opposition forces that overthrew Assad and has since pledged to help Syria’s reconstruction and economic revival.

“While strengthening Türkiye-Syria economic and commercial relations, we are developing cooperation opportunities that will contribute to Aleppo’s reconstruction and economic development,” Bolat said.

He stressed that stronger bilateral economic and trade relations would contribute to the prosperity of both countries, highlighting the importance of measures to promote production, investment and exports.

Restoring production facilities, increasing employment and strengthening trade routes are crucial to Aleppo’s economic recovery, the minister told business representatives.

Bolat said relations between Türkiye and Aleppo extend beyond commerce, pointing to nearly a millennium of kinship, neighborly ties and shared culture in the region.

Following his visit to the industrial zone, Bolat attended a roundtable meeting with Turkish and Syrian businesspeople.

The meeting focused on bilateral trade relations, Aleppo’s economic situation, the city’s reconstruction and measures to develop its industrial and commercial infrastructure.

Bolat said efforts to revitalize Aleppo were also of major importance for the future of the wider region.

Trade with Syria reaches $3.75B

On Thursday, Bolat attended a business meeting in Aleppo alongside Turkish and Syrian officials, lawmakers and investors.

He said the bilateral trade with Syria reached $3.75 billion in 2025, up 42% year-over-year.

The neighbors are eyeing reaching a $10 billion volume in the near future.

Bolat stated that the two countries achieved positive progress following three meetings with Syrian ministers over the past month.

The Turkish government is working to maximize its contribution to Syria’s reconstruction and economic stability, the minister added.

He noted that Syria continues to rebuild its state structure across all sectors despite Western embargoes and Israeli military pressure over the past 20 months.

The Daily Sabah Newsletter

Keep up to date with what’s happening in Turkey,
it’s region and the world.

SIGN ME UP

You can unsubscribe at any time. By signing up you are agreeing to our Terms of Use and Privacy Policy.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Türkiye’s foreign trade deficit widened 13.6% year-over-year despite the highest-ever July exports, with the seven-month gap climbing 8.3%, official data showed Friday.

Exports rose 2.9% year-over-year to $25.62 billion, Türkiye’s second-highest monthly export value on record, while imports increased 5.1% to $32.97 billion.

That led to a trade deficit of $7.34 billion in July, pushing the shortfall in the seven-month period to $60.55 billion, data by the Turkish Statistical Institute (TurkStat) and the Trade Ministry showed.

The export-to-import coverage ratio declined to 77.7% from 79.4% in July 2025.

Despite regional conflicts and adverse global conditions, exports in the January-July period grew 3.4% year-over-year to $161.5 billion, Trade Minister Ömer Bolat said.

Imports during the seven months climbed 4.7% to nearly $222.1 billion.

Türkiye’s annualized exports increased 3.4%, or $9.2 billion, from a year earlier to $278.5 billion as of July.

Annualized imports rose 4.9%, or $17.6 billion, to $375.3 billion, the data showed.

Bolat said exports remained resilient despite ongoing geopolitical tensions, increasingly difficult international conditions, rising protectionism and weak external demand.

The government will continue strengthening Türkiye’s export potential through financing, export support, guidance and the activities of its overseas organization, he added.

“We will continue working with all our strength in the coming period to exceed the Medium-Term Program export target of $282 billion,” Bolat said.

Germany was Türkiye’s largest export destination in July, receiving goods worth over $2 billion, followed by the U.S. with $1.7 billion, the U.K. with $1.3 billion, Iraq with $1.1 billion and Italy with $1.1 billion.

China was the largest source of imports at over $5 billion, followed by Russia at $3.2 billion and Germany at $2.5 billion.

Manufacturing products accounted for 94.4% of total exports, while high-technology goods represented 4.4% of manufacturing exports.

The Daily Sabah Newsletter

Keep up to date with what’s happening in Turkey,
it’s region and the world.

SIGN ME UP

You can unsubscribe at any time. By signing up you are agreeing to our Terms of Use and Privacy Policy.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Türkiye increased its imports ⁠of diesel from the United States and India in August to record levels, shipping data showed, as a ​Russian ban on diesel exports and wider ​disruption ⁠caused by the Iran war prompted its importers to diversify their sources of supply.

So far this month, Türkiye has imported more than 120,000 barrels per day of Indian diesel, while its imports from the U.S. reached 90,000 bpd, according to the commodities data firm Kpler.

These volumes are the highest monthly totals on record, according to Kpler data going back to 2017.

Russia banned exports of diesel until at least ⁠the ⁠end of August after Ukrainian strikes on refineries disrupted domestic supplies. Middle Eastern supplies have been curbed by war damage to the region’s oil refineries and reduced shipping through the Strait of Hormuz.

“With Russian refinery disruptions and export restrictions, Türkiye is having to scramble for barrels from the non-Russian pool,” Sparta Commodities analyst Abhishek Kumar said.

Energy Aspects, which ⁠also provides data on energy flows, estimated India sent a smaller amount of 74,000 bpd to Türkiye in August and that the U.S. shipped ​70,000 bpd. Still, these are the highest since 2022 and 2019, ​respectively, based on EA data.

Türkiye’s imports of Russian diesel declined to around 100,000 bpd in July and ⁠80,000 ‌bpd ‌in August, having held above 200,000 bpd in ⁠the earlier months of this ‌year since January, Kpler data showed.

This reduced Russia’s share of Türkiye’s diesel ​imports to 20% in ⁠August. In 2025, Russia supplied 85% of Türkiye’s ⁠diesel imports, with 281,000 bpd, according to the Turkish energy regulator.

Russia ⁠may extend ​the diesel export ban into September, according to industry sources.

The Daily Sabah Newsletter

Keep up to date with what’s happening in Turkey,
it’s region and the world.

SIGN ME UP

You can unsubscribe at any time. By signing up you are agreeing to our Terms of Use and Privacy Policy.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Iran is preparing a list of conditions for ⁠reopening the Strait ⁠of Hormuz after mediators asked Tehran to set them out, a senior official said Thursday, adding that ending the regional war was among them.

Mohsen Rezaei, ​secretary of Iran’s Supreme National Security ​Council, ⁠said Tehran had agreed with Oman on a shipping corridor through the strait, with parts of the route in Omani waters and parts in Iranian waters.

Ships would use a designated central channel if the U.S. met Iran’s conditions, he said through ⁠an interpreter ⁠in an Al Manar TV interview.

On Wednesday, reports said Iran and Oman were still working on details of an agreement on the waterway after Iran’s Revolutionary Guards said the two countries had agreed on how to share control of the ⁠strait and its revenues.

A Guards spokesperson said Iran would not allow the strait to reopen unless Washington lifted ​what Tehran describes as a blockade of Iranian ports ​while also paying compensation and removing sanctions.

Before the war began in February, ⁠the ‌strait carried ‌roughly one-fifth of global oil and ⁠liquefied natural gas shipments. Transit through the waterway has largely stopped since then.

Cease-fire ​agreements announced by ⁠Washington and Tehran in April and ⁠June were intended to restore maritime traffic, ⁠but did ​not hold.

The Daily Sabah Newsletter

Keep up to date with what’s happening in Turkey,
it’s region and the world.

SIGN ME UP

You can unsubscribe at any time. By signing up you are agreeing to our Terms of Use and Privacy Policy.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.