US interest rates in December are closer to being fixed.

Currently, no further cuts to U.S. interest rates are expected during 2025, with the most likely scenario being that the Federal Reserve will keep them unchanged at the December meeting.

Previous forecasts had indicated a 90% probability of a rate cut, but this has now dropped to just 40%, due to the government shutdown and the absence of certain labor market and inflation data.

In related developments, it was noted that Gulf bonds will not be significantly affected by the Federal Reserve’s decisions, since Gulf currencies are pegged to the dollar. Increased momentum is expected in bond and sukuk issuance in the Gulf region next year.

A continued decline in the dollar’s value is anticipated in 2026, as global supply increases with Japan and China selling U.S. bonds this year.