US Federal Reserve widely expected to hold interest rates

The US Federal Reserve is expected to hold rates steady on Wednesday, maintaining the federal funds target range at 4.25 per cent to 4.5 per cent.

- Somshankar Bandyopadhyay

According to the CME FedWatch Tool, there is a 99.8 per cent implied probability that the Fed will stay on pause this week, reinforcing consensus around a cautious, data-dependent policy stance.

The UAE Central Bank is also likely to follow suit, maintaining its overnight deposit facility (ODF) at 4.40 per cent. The UAE follows US monetary as the UAE dirham is pegged to the US dollar.

For the UAE, a pause in rate changes means local borrowing costs will likely remain unchanged in the near term. "This stability supports ongoing economic momentum in the Emirates, particularly in sectors like real estate and tourism, which benefit from predictable financing conditions. However, businesses and consumers should remain attentive to future Fed signals, as any shift in US policy will directly influence monetary conditions in the UAE," said Hamza Dweik, Head of Trading, Saxo Bank Mena.

Mixed economic signals