What if premature rate cuts send the Turkish lira past 55?
Premature rate cuts gapping the lira past 55 is a textbook Turkish FX blowout — TRY and TURKGB sell, local inflation expectations un-anchor, but the global read is muted. Directly rhymes with Erdogan's 2021 unorthodox-cut crisis that sent the lira down ~45%. Turkey funds its external gap via portfolio/Gulf inflows; the novel angle is that after the 2023-24 Simsek orthodoxy, an abrupt reversal would be a far sharper credibility shock than the slow 2021 bleed.
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The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. Ankara abandons orthodox policy and cuts rates prematurely, gapping the lira past 55/USD overnight. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Inflation surprise ▲ — which propagate through our causal graph to the markets below.