For borrowers in UAE, relief is on the horizon

BUT IT'LL BE GRADUAL AS FED NOT IN A RUSH TO CUT RATES MORE

- BY JUSTIN VARGHESE

After two expensive years of borrowing, many people in the UAE are finally getting a bit of good news: the cost of loans, mortgages and credit cards is expected to drift lower in 2026 just not all at once.

This shift is happening because the US Federal Reserve whose decisions directly influence UAE interest rates has already cut its main rate several times since 2024. And although it now plans to slow down, even these small steps help ease the pressure on UAE borrowers.

For now, the Fed expects only one more cut next year and one in 2026.

What Fed is really saying

Fed Chair Jerome Powell called the latest cut a "prudent adjustment" and made it clear that the Fed isn't rushing into a long cutting cycle. Policymakers now expect the economy to stay steady without needing large rate drops.