Gulf stock markets are displaying mixed early-session reactions as investor expectations for a US Federal Reserve rate cut in December surge. The probability of the Fed cutting its key rate has jumped significantly to approximately 81%, up from around 40% just a week prior, following recent signals from policymakers.
Regional exchanges saw modest gains, with the Dubai index up 0.4% and Abu Dhabi up 0.2%, reflecting the complex balance of global sentiment. Because GCC currencies are largely pegged to the US dollar, central banks in the region typically mirror the Fed’s monetary policy. Therefore, a US rate cut is widely expected to trigger corresponding cuts in the Gulf.
For professionals and businesses with corporate borrowing and trade finance exposure, lower interest rates could translate to cheaper credit, which tends to boost domestic demand, particularly in sectors like real estate. However, the potential shift in dollar dynamics and local policy adjustments require close monitoring.
