Josh Gilbert, Lead Analyst APAC and Middle East
Dubai, United Arab Emirates – October, 2025
Wall Street has all but written off a rate hike this month, but Wednesday night’s inflation print could all but seal a December hike if it comes in hot, said Josh Gilbert, etoro Lead Analyst APAC and Middle East.
Markets are pricing roughly a 20% chance the Fed moves on October 28th, and with several Fed officials making it clear another hike is coming before the end of the year, the focus now turns to how high rates go from here.
Headline inflation is expected to jump to 3.7% from 3.4% in August, but that’s largely an oil story, with Brent sitting above USD$100 a barrel and energy doing much of the heavy lifting. Core inflation is the number that will matter most to the Fed, and at 2.4% in August, it has been far better behaved. If the monthly core reading comes in above the 0.2% economists are expecting, it would show price pressures are spreading well beyond the petrol pump, and that’s the scenario most likely to force the Fed’s hand sooner rather than later.
With the dirham pegged to the US dollar, the Central Bank of the UAE moves in step with the Fed, and it already matched September’s hike by lifting its base rate to 3.9%. If Wednesday’s print locks in a December move from Washington, expect the UAE to follow, keeping borrowing costs elevated across the Emirates at a time when US bond markets are already flashing warning signs, with the 10-year yield hovering around 5.2% after touching its highest level in 24 years last week.
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