Investors in New York who’ve been told that tackling inflation is Turkey’s “No. 1 priority” are about to find out just how far the central bank is willing to go to rein in price growth running at almost 60%.

Market sentiment has already shifted in anticipation that policymakers will deliver a far bigger hike in interest rates this week than initially expected. The intrigue has only grown after President Recep Tayyip Erdogan’s apparent endorsement of monetary tightening as the $900 billion economy suffers a cost-of-living crisis.

Though forecasts range widely, most economists surveyed by Bloomberg predict an increase of 500 basis points to 30% on Thursday, in what would be the central bank’s fourth straight hike under the stewardship of Governor Hafize Gaye Erkan.

There are outliers on both sides: Societe Generale SA and MUFG Bank see a move to 31%, while Barclays Plc and Bank of America Corp. are among prognosticators at the other extreme that anticipate a more gradual hike to 27.5%.

The tightening cycle that began after Erdogan’s reelection in May has taken on urgency as the president’s new team of technocrats tries to win back investors who’ve shunned Turkey after years of erratic and unconventional policies knocked the economy off balance.

“If Turkey is going to continue its recent success in improving investor confidence, then the market requires a strong message that the central bank is going to get inflation under control,” said Cagri Kutman, Turkish market specialist at KNG Securities who predicts a hike of up to 600 basis points and then more tightening.

What Bloomberg Economics Says...

“Our initial call for this meeting was a 250 basis-point hike, but we have doubled that outlook after the central bank said earlier this month that it was expanding the daily limit for rediscount loans. We see this move as a preemptive step toward partially alleviating the pressure on credit conditions for exporting firms — and as a signal that large rate hikes are coming.”

— Selva Bahar Baziki, economist. Click here to read more.

Erdogan, whose speeches were long parsed for clues to the direction of monetary policy, is seemingly rethinking his long-held beliefs that ultra-low rates could curb inflation. He’s recently voiced support for tougher measures designed by Erkan and his new finance minister, Mehmet Simsek.

It’s a message Simsek took on the road this week for a series of investor meetings in the US. The new vision remains a tough sell because of Erdogan’s track record of prioritizing economic growth and ousting three consecutive central bank governors for not being dovish enough.

The central bank is coming off a meeting in August that included new members of the Monetary Policy Council, named by Erdogan as part of the president’s revamp of his economic team. After underwhelming expectations each time since Erkan was appointed in June, last month’s decision to hike by 750 basis points exceeded most forecasts.

The shift is helping Turkish banks and companies regain access to international capital markets and even drawing some foreign investors back toward local-currency government bonds.

Read more: Banks Open Bond Floodgates for Turkey Inc. and Find Eager Market

Ahead of the meeting on Thursday, positioning by traders showed they are betting on a more positive outlook for the lira and expect it to get more volatile, after years of central bank efforts that kept the currency relatively stable.

Despite the rate hikes since June, inflation expectations have deteriorated so much that the central bank may need to increase borrowing costs by 750 basis points again this week, according to Hakan Kara, former chief economist at the Turkish central bank.

“For the rate hike to be more effective, it must be front-loaded and strong,” Kara said on X, formerly known as Twitter. “We have repeatedly emphasized that moving slowly will be more costly for the economy than moving fast.”

--With assistance from Joel Rinneby and Kerim Karakaya.