Gulf stock markets ended on a high yesterday, buoyed by growing expectations of a U.S. Federal Reserve interest rate cut this week.
It comes as investors absorb the latest U.S. inflation data, strengthening expectations for a Federal Reserve rate cut ahead of the review tomorrow.
The annual inflation rate stood at 2.8% in September, the most recent available data because of the government shutdown between October-November.
U.S. labour markets remain soft with a record number of layoffs recorded, whilst the cost-of-living soars.
LSEG data shows an 84% probability that the Fed will cut interest rates by 25%. ME markets reacted positively: Dubai’s index recorded a 2.5% gain in the week, its biggest increase in more than four months, while Abu Dhabi closed the week up 2.1%.
If announced, lower interest rates help governments, investors, and consumers alike as borrowing costs climbdown. Real estate firms and holders of older sukuk benefit from the rate cut.
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