Abstract:

The study has studied the impact of the interest decisions made by the Federal Reserve System, which fulfils the duty of the U.S. Central Bank, during the periods of strict or expanding monetary policy on the BIST 100 index, one of the main indicators used in the Borsa Istanbul Pay Market. The data set used in the study covers the dates between 04.01.1988 and 06.08.2018. The purpose of this study is to determine the existence, direction and size of the relationship between the interest rate reduction or increase decisions received by the Federal Reserve System in the Stock Exchange in Istanbul. To make this detection, a model was created using the analysis of the trial and regression decision trees. The Federal Reserve System has determined how the change in interest rates has an impact on the BIST 100 index. As a result, it was observed that the effect of the interest rate announced by the Federal Reserve System on the BIST 100 index remained limited to the next trading day, that the effect in a weekly trading process became clear and that the effect continued to decrease with time until the next Federal Reserve System announced the interest rate.

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