The Federal Reserve is on the cusp of cutting US interest rates in September. A low interest rate environment will typically lead to better borrowing conditions but end the good run for savers, financial experts say.
Whether it is beneficial to wait and watch for more interest rate cuts or act now will depend on your specific financial circumstances, they advise.
“For example, it is a good idea to act now if you have high-interest debt,” says David Denton, technical consultant at investment management firm Quilter Cheviot.
“Although there may be more cuts on the way, it is never wise to let debts continue to pile up, so making the most of a rate cut sooner rather than later is wise.
“However, while it is good to take advantage of broader macro-economic conditions if you can, it is not sensible to plan your finances solely around things like rate cuts, which are out of your control.”
The Federal Reserve may begin cutting interest rates for the first time in four years at its meeting on September 17 and 18.
Most central banks in the GCC follow the Fed's policy rate moves due to their currencies being pegged to the US dollar.
The Federal Open Market Committee has kept the federal funds rate at 5.25 per cent to 5.5 per cent since July 2023, but markets are now heavily favouring a quarter-point cut in September.
Expectations of a rate cut are based on the continuing cooling in inflation at all levels in the US.
The Consumer Price Index (CPI) report from July 15 showed a 0.1 per cent drop in prices for June and a modest 3 per cent year-on-year increase.
Inflation in the US had reached a 40-year high of 9.1 per cent in June 2022.
“Awareness is key,” says Carol Glynn, founder of Conscious Finance Coaching. “Knowing it is coming, then look at the areas of your finances it will likely impact.”
“Do you have debt or savings? Then you will be impacted.
“Are you planning to buy a home or take out a loan? Then you will be impacted.”
Lower interest rates mean a range of personal finance products – from loans to credit cards, mortgages and savings – will be affected and borrowing will become less expensive. Here is a look at how consumers can prepare their finances:
Mortgages
A Fed rate cut makes it a good time to refinance existing mortgages or lock in a new, lower fixed-rate loan.
The cut will probably lower interest rates on new mortgages and refinancing options, according to Ben Bolger, a financial planner in Abu Dhabi and co-founder of digital learning platform Squirrel Education.
“This means lower monthly payments for borrowers, making home ownership and refinancing existing mortgages more affordable,” he says.
“Homeowners could consider refinancing to secure a lower rate and reduce their overall interest expense over the life of the loan.”
However, it is important to factor in the costs of refinancing as this may erase any benefits of a lower rate, he warns.
Homeowners can save significantly on interest payments over the life of their loans, increasing disposable income for other investments or savings, Quilter Cheviot’s Mr Denton says.
However, given how much rates have had to climb, he believes it is unlikely that the first cut in rates will have a big impact.
“Mortgage rates are determined by swap rates, which are the interest rates that lenders pay to offset the risk of fixed-rate lending,” he says.
“Swap rates are a major contributing factor to the final mortgage rate offered to a homeowner and these rates often price in the cost of an interest-rate cut far before the event actually happens.”
Fixed-rate mortgage holders will not see a change until their fixed terms have expired.
But there might be an opportunity to lock in lower rates if you have a high-interest mortgage, Ms Glynn suggests.
“Research switching from a variable to a fixed-rate mortgage during times of lower interest rates to stabilise payments and lock in savings on interest,” Ms Glynn recommends.
“But be patient, it may take months, if not years, to see a material impact on rates unless the Fed makes unexpected large interest rate cuts.”
Credit cards
Interest rates on credit card balances typically decrease following a Fed rate cut, Mr Bolger says.
While this reduces the cost of carrying a balance, consumers should still aim to pay off high-interest debt quickly to avoid accumulating more interest charges, he warns.
“Consumers should consider transferring balances to lower-rate cards and paying down high-interest debt more aggressively to take advantage of reducing rates,” Mr Denton says.
However, it is not guaranteed that banks may pass on the interest rate cut to their customers, according to Ms Glynn.
Pay down as much of your credit card debt as possible now, regardless of interest rate, as even in low Fed interest rate periods, credit cards are still extremely expensive forms of debt, she says.
Watch: US Federal Reserve keeps interest rates on hold
Loans
Interest rates on car and personal loans are also likely to decrease, making borrowing cheaper.
This could spur consumer spending in these categories, as lower monthly payments increase affordability, according to Mr Bolger.
Ms Glynn suggests waiting to get a car or personal loan to get better terms after the rate cut.
Shop around for the best deals as rates can vary widely, she says, and it may take time for the rate cuts to trickle down to the consumer.
“But also be aware, lower interest rates tend to create more demand and so can increase prices, which often offset the benefits lower interest rates bring,” she adds.
Savings
The yield on savings accounts, certificates of deposit and other interest-bearing deposit accounts will probably decline, Mr Bolger believes.
Savers may see reduced returns on their deposits, which could prompt a search for higher-yielding investment alternatives, such as bonds or dividend-paying stocks, he says.
Realistically, how much you will save when the Fed lowers rates will depend on how quickly it cuts and by how much each time, he adds.
“A rate cut generally leads to lower interest rates on savings accounts, meaning people will earn less interest,” Mr Denton says.
“Despite many people perceiving cash as safe, unless you are making an inflation-beating return, you will be losing money in real terms constantly.
“Savers, therefore, might consider other investment options to achieve higher returns and help ensure their money does not essentially decay.”
A rate cut generally leads to lower interest rates on savings accounts, meaning people will earn less interest on their savings
David Denton,
technical consultant, Quilter Cheviot
Diversifying into higher-yield investments, such as bonds or stocks, could offer better growth potential but this comes with added risk, he warns.
If you have cash that will not be needed for the coming year or more, consider locking in higher rates with long-term savings products like fixed-term deposits before the rates decrease, Ms Glynn recommends.
Which countries will be affected more?
The US is naturally directly impacted as the Fed’s decisions primarily affect its economy first, says Ms Glynn.
“In countries with currencies pegged to the US dollar, like many countries in the Middle East, including the UAE, monetary policies in these countries often mirror those of the US and so they will also be affected,” she says.
“Any country with US dollar debt or [that] operates trade in USD, will also be impacted. Fed interest rates influence global financial markets, affecting trade, investment and economic stability worldwide.”
Regions with higher dependency on US trade and financial systems, such as Europe and emerging markets, will be more affected by the Fed’s rate cut, according to Mr Denton.
These areas might experience capital inflows, currency appreciation and changes in their own central bank policies to align with the Fed’s actions, he states.
Conversely, regions with less direct economic linkage to the US might see more subdued effects.
“North America, Canada and Mexico will likely experience larger impacts due to their strong economic connections with the US and the USMCA (United States-Mexico-Canada) trade agreement,” Mr Bolger says.
“In addition, emerging markets with substantial dollar-denominated debt may face increased financial volatility and currency fluctuations.
“A Fed rate cut may initially ease their debt servicing costs, as borrowing in dollars becomes cheaper due to lower interest rates.
“This can provide short-term relief for many countries such as Turkey, Argentina and South Africa, which have significant amounts of debt issued in US dollars.”
Company%20profile
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What vitamins do we know are beneficial for living in the UAE
Vitamin D: Highly relevant in the UAE due to limited sun exposure; supports bone health, immunity and mood.
Vitamin B12: Important for nerve health and energy production, especially for vegetarians, vegans and individuals with absorption issues.
Iron: Useful only when deficiency or anaemia is confirmed; helps reduce fatigue and support immunity.
Omega-3 (EPA/DHA): Supports heart health and reduces inflammation, especially for those who consume little fish.
Ziina users can donate to relief efforts in Beirut
Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”
The years Ramadan fell in May
'The worst thing you can eat'
Trans fat is typically found in fried and baked goods, but you may be consuming more than you think.
Powdered coffee creamer, microwave popcorn and virtually anything processed with a crust is likely to contain it, as this guide from Mayo Clinic outlines:
Baked goods - Most cakes, cookies, pie crusts and crackers contain shortening, which is usually made from partially hydrogenated vegetable oil. Ready-made frosting is another source of trans fat.
Snacks - Potato, corn and tortilla chips often contain trans fat. And while popcorn can be a healthy snack, many types of packaged or microwave popcorn use trans fat to help cook or flavour the popcorn.
Fried food - Foods that require deep frying — french fries, doughnuts and fried chicken — can contain trans fat from the oil used in the cooking process.
Refrigerator dough - Products such as canned biscuits and cinnamon rolls often contain trans fat, as do frozen pizza crusts.
Creamer and margarine - Nondairy coffee creamer and stick margarines also may contain partially hydrogenated vegetable oils.
GIANT REVIEW
Starring: Amir El-Masry, Pierce Brosnan
Director: Athale
Rating: 4/5
West Asia rugby, season 2017/18 - Roll of Honour
Western Clubs Champions League - Winners: Abu Dhabi Harlequins; Runners up: Bahrain
Dubai Rugby Sevens - Winners: Dubai Exiles; Runners up: Jebel Ali Dragons
West Asia Premiership - Winners: Jebel Ali Dragons; Runners up: Abu Dhabi Harlequins
UAE Premiership Cup - Winners: Abu Dhabi Harlequins; Runners up: Dubai Exiles
UAE Premiership - Winners: Dubai Exiles; Runners up: Abu Dhabi Harlequins
The specs
Engine: 2.0-litre four-cylinder turbo
Power: 268hp at 5,600rpm
Torque: 380Nm at 4,800rpm
Transmission: CVT auto
Fuel consumption: 9.5L/100km
On sale: now
Price: from Dh195,000
Trippier bio
Date of birth September 19, 1990
Place of birth Bury, United Kingdom
Age 26
Height 1.74 metres
Nationality England
Position Right-back
Foot Right
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
- Kings School Al Barsha (Dubai) – Dh71,905
- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
- The British School Al Khubairat (Abu Dhabi) - Dh54,170
- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
MATCH INFO
Uefa Champions League final:
Who: Real Madrid v Liverpool
Where: NSC Olimpiyskiy Stadium, Kiev, Ukraine
When: Saturday, May 26, 10.45pm (UAE)
TV: Match on BeIN Sports
COMPANY%20PROFILE
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Who has lived at The Bishops Avenue?
- George Sainsbury of the supermarket dynasty, sugar magnate William Park Lyle and actress Dame Gracie Fields were residents in the 1930s when the street was only known as ‘Millionaires’ Row’.
- Then came the international super rich, including the last king of Greece, Constantine II, the Sultan of Brunei and Indian steel magnate Lakshmi Mittal who was at one point ranked the third richest person in the world.
- Turkish tycoon Halis Torprak sold his mansion for £50m in 2008 after spending just two days there. The House of Saud sold 10 properties on the road in 2013 for almost £80m.
- Other residents have included Iraqi businessman Nemir Kirdar, singer Ariana Grande, holiday camp impresario Sir Billy Butlin, businessman Asil Nadir, Paul McCartney’s former wife Heather Mills.
Hunting park to luxury living
- Land was originally the Bishop of London's hunting park, hence the name
- The road was laid out in the mid 19th Century, meandering through woodland and farmland
- Its earliest houses at the turn of the 20th Century were substantial detached properties with extensive grounds
Profile of Udrive
Date started: March 2016
Founder: Hasib Khan
Based: Dubai
Employees: 40
Amount raised (to date): $3.25m – $750,000 seed funding in 2017 and a Seed round of $2.5m last year. Raised $1.3m from Eureeca investors in January 2021 as part of a Series A round with a $5m target.
MATCH INFO
Who: France v Italy
When: Friday, 11pm (UAE)
TV: BeIN Sports
THE BIO
Family: I have three siblings, one older brother (age 25) and two younger sisters, 20 and 13
Favourite book: Asking for my favourite book has to be one of the hardest questions. However a current favourite would be Sidewalk by Mitchell Duneier
Favourite place to travel to: Any walkable city. I also love nature and wildlife
What do you love eating or cooking: I’m constantly in the kitchen. Ever since I changed the way I eat I enjoy choosing and creating what goes into my body. However, nothing can top home cooked food from my parents.
Favorite place to go in the UAE: A quiet beach.
Jigra
Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh
The biog
Name: Atheja Ali Busaibah
Date of birth: 15 November, 1951
Favourite books: Ihsan Abdel Quddous books, such as “The Sun will Never Set”
Hobbies: Reading and writing poetry
Results
2pm: Maiden (TB) Dh60,000 (Dirt) 1,200m, Winner: Mouheeb, Tom Marquand (jockey), Nicholas Bachalard (trainer)
2.30pm: Handicap (TB) Dh68,000 (D) 1,200m, Winner: Honourable Justice, Royston Ffrench, Salem bin Ghadayer
3pm: Handicap (TB) Dh84,000 (D) 1,200m, Winner: Dahawi, Antonio Fresu, Musabah Al Muhairi
3.30pm: Conditions (TB) Dh100,000 (D) 1,200m, Winner: Dark Silver, Fernando Jara, Ahmad bin Harmash
4pm: Maiden (TB) Dh60,000 (D) 1,600m, Winner: Dark Of Night. Antonio Fresu, Al Muhairi.
4.30pm: Handicap (TB) Dh68,000 (D) 1,600m, Winner: Habah, Pat Dobbs, Doug Watson
The specs
Common to all models unless otherwise stated
Engine: 4-cylinder 2-litre T-GDi
0-100kph: 5.3 seconds (Elantra); 5.5 seconds (Kona); 6.1 seconds (Veloster)
Power: 276hp
Torque: 392Nm
Transmission: 6-Speed Manual/ 8-Speed Dual Clutch FWD
Price: TBC
Results
4pm: Al Bastakiya – Listed (TB) $150,000 (Dirt) 1,900m; Winner: Panadol, Mickael Barzalona (jockey), Salem bin Ghadayer (trainer)
4.35pm: Dubai City Of Gold – Group 2 (TB) $228,000 (Turf) 2,410m; Winner: Walton Street, William Buick, Charlie Appleby
5.10pm: Mahab Al Shimaal – Group 3 (TB) $228,000 (D) 1,200m; Winner: Canvassed, Pat Dobbs, Doug Watson
5.45pm: Burj Nahaar – Group 3 (TB) $228,000 (D) 1,600m; Winner: Midnight Sands, Pat Dobbs, Doug Watson
6.20pm: Jebel Hatta – Group 1 (TB) $260,000 (T) 1,800m; Winner: Lord Glitters, Daniel Tudhope, David O’Meara
6.55pm: Al Maktoum Challenge Round-1 – Group 1 (TB) $390,000 (D) 2,000m; Winner: Salute The Soldier, Adrie de Vries, Fawzi Nass
7.30pm: Nad Al Sheba – Group 3 (TB) $228,000 (T) 1,200m; Winner: Final Song, Frankie Dettori, Saeed bin Suroor
It's up to you to go green
Nils El Accad, chief executive and owner of Organic Foods and Café, says going green is about “lifestyle and attitude” rather than a “money change”; people need to plan ahead to fill water bottles in advance and take their own bags to the supermarket, he says.
“People always want someone else to do the work; it doesn’t work like that,” he adds. “The first step: you have to consciously make that decision and change.”
When he gets a takeaway, says Mr El Accad, he takes his own glass jars instead of accepting disposable aluminium containers, paper napkins and plastic tubs, cutlery and bags from restaurants.
He also plants his own crops and herbs at home and at the Sheikh Zayed store, from basil and rosemary to beans, squashes and papayas. “If you’re going to water anything, better it be tomatoes and cucumbers, something edible, than grass,” he says.
“All this throwaway plastic - cups, bottles, forks - has to go first,” says Mr El Accad, who has banned all disposable straws, whether plastic or even paper, from the café chain.
One of the latest changes he has implemented at his stores is to offer refills of liquid laundry detergent, to save plastic. The two brands Organic Foods stocks, Organic Larder and Sonnett, are both “triple-certified - you could eat the product”.
The Organic Larder detergent will soon be delivered in 200-litre metal oil drums before being decanted into 20-litre containers in-store.
Customers can refill their bottles at least 30 times before they start to degrade, he says. Organic Larder costs Dh35.75 for one litre and Dh62 for 2.75 litres and refills will cost 15 to 20 per cent less, Mr El Accad says.
But while there are savings to be had, going green tends to come with upfront costs and extra work and planning. Are we ready to refill bottles rather than throw them away? “You have to change,” says Mr El Accad. “I can only make it available.”
