Key figures (as of 30 October 2026)
| Target range for the policy rate | 3.75% to 4.00%, held on 28 October 2026 by a 10 to 2 vote; both dissenting members preferred a 0.25 point increase |
| Last change | raised by 0.25 percentage points on 16 September 2026, from a range of 3.50% to 3.75% |
| Target range at the end of 2025 | 3.50% to 3.75%, after a 0.25 point reduction on 10 December 2025 |
| Rate paid on reserve balances | 3.90%, effective 29 October 2026 |
| Committee median projection, end of 2027 (September 2026) | 4.1%, up from 3.6% in the June 2026 projections |
| Committee median projections, other years (September 2026) | 4.1% at the end of 2026, 3.9% at the end of 2028, 3.2% in the longer run |
| Participants' end-2027 projections (September 2026) | 8 at 4.375%, 6 at 4.125%, 3 at 3.625% and 1 at 3.125% (midpoints of the target range) |
| Committee median inflation projections (September 2026) | price index for personal consumption 3.7% in 2026 and 2.3% in 2027; excluding food and energy 3.4% and 2.5% |
| Committee median growth and unemployment projections (September 2026) | real GDP growth 2.3% in 2026 and 2.4% in 2027; unemployment rate 4.1% at the end of 2026 and 2027 |
| Meetings scheduled in 2027 | 8, of which one is set aside for a review of policy strategy without a rate decision |
From cuts to increases
The committee lowered the target range at three meetings in a row in late 2025, ending the year at 3.50% to 3.75% after a 0.25 point reduction on 10 December 2025. In 2026 it changed direction. On 16 September 2026 it raised the range by 0.25 points to 3.75% to 4.00%, stating that inflation remains elevated and that the increase would support a timelier return to its 2% goal.
On 28 October 2026 it held the range at 3.75% to 4.00%. Its statement said that economic activity is expanding at a strong pace and that inflation remains elevated. Two of the twelve voting members preferred a further 0.25 point increase at that meeting.
What the committee projects
The committee publishes its members' projections four times a year. In the September 2026 round, the median projection for the end of 2026 is 4.1%, which points to one more 0.25 point increase before the end of 2026, on the Centre's own reading. The median projection for the end of 2027 is also 4.1%, half a point above the 3.6% median in June 2026. The median for the end of 2028 is 3.9%, and the longer-run median is 3.2%.
The spread of views is wide. For the end of 2027, the projections convert to the following upper bounds, on the Centre's own calculation:
| Upper bound implied for end-2027 | Number of participants (September 2026) |
|---|---|
| 4.50% | 8 |
| 4.25% | 6 |
| 3.75% | 3 |
| 3.25% | 1 |
Converted from the projected midpoints by adding 0.125 percentage points, on the Centre's own calculation. 18 participants submitted projections.
On this conversion, 14 of the 18 participants placed the end-2027 upper bound at 4.25% or 4.50%, above the current 4.00%. Three placed it at 3.75%, 0.25 points below today's level, and one at 3.25%, 0.75 points below it, on the Centre's own calculation.
The same projections show inflation easing from 3.7% in 2026 to 2.3% in 2027, with growth of 2.4% in 2027 and an unemployment rate of 4.1%.
The 2027 meeting calendar
Eight meetings are scheduled for 2027, the last on 7 and 8 December 2027. The committee's chair said in October 2026 that one meeting in 2027 is to focus on broad policy strategy, with no vote on the policy rate and no policy statement expected. That leaves seven scheduled meetings at which the rate could be changed in 2027.
The Gulf link
The UAE's base rate is anchored to the US rate paid on reserve balances. On 28 October 2026 the UAE's monetary authority held its base rate at 3.90%, in step with the US decision. The path of the US rate therefore also shapes borrowing costs in the UAE.
What it means
The committee's own projections lean towards a slightly higher rate at the end of 2027 than today, while its latest decision was to hold. On the Centre's estimates, the combined weight on an upper bound of 4.25% or more, meaning higher than today, is 60%, and the combined weight on 4.75% or more is 24%. The combined weight on an upper bound below 4.25% is 40%.
Scenarios: the upper bound of the US target range on 31 December 2027
These probabilities are the Centre's analytical estimates, reasoned from the figures above. Because the bands are ordered, the forecast is scored with both the multi-category Brier score and the ranked probability score.
The variable is the upper bound, in percent, of the target range for the US monetary authority's main policy rate in effect at the end of 31 December 2027, US Eastern time. It is read from the rate-setting committee's most recent policy statement and accompanying implementation note, as first published, whose decision takes effect on or before 31 December 2027; decisions taking effect after that date do not count. If the statement and note cannot be read, the body's own official historical series of target-range changes, as first published after 31 December 2027, is used. Withdrawn if neither is available by 31 December 2028. Market rates, the effective rate actually traded, projections and forecasts do not count. If the target is redefined, or a single target level replaces the range, the upper bound of the new target, or the single level, is used. The bands are half-open intervals that cover every possible value, including a single target level off the usual 0.25 point steps, and each edge falls in the higher band: exactly 3.75% falls in band 2, exactly 4.25% in band 3, exactly 4.75% in band 4 and exactly 5.25% in band 5.
Lower: below 3.75%, that is 3.50% or lower on the usual steps
This means an upper bound more than 0.25 points below the current 4.00% and below the end-2025 upper bound of 3.75%; on the usual 0.25 point steps, a cut of at least 0.50 points from today's level, on the Centre's own calculation. Only one of the 18 participants projected a value in this band, at 3.25%. It would follow if growth slows sharply and inflation falls faster than projected. The weight is low.
Near current levels: 3.75% to below 4.25%, that is 3.75% or 4.00% on the usual steps
This band holds the current upper bound of 4.00% and the end-2025 level of 3.75%. On the usual steps, it means no net change, or one 0.25 point cut, from today's level, and no change or one 0.25 point increase from the end-2025 level, on the Centre's own calculation. Three participants projected 3.75%. It would follow if the committee makes no further increase and inflation eases as projected. Holding steady has been the committee's choice at its latest meeting, so the weight is substantial.
Somewhat higher: 4.25% to below 4.75%, that is 4.25% or 4.50% on the usual steps
This is the most likely band. It holds the committee's median projection for the end of 2027, which corresponds to 4.25%, the 4.25% level projected by six participants and the 4.50% level projected by eight: 14 of the 18 participants in all. On the usual steps, it means one or two 0.25 point increases, net, from today's level, or 0.50 to 0.75 points above the end-2025 level, on the Centre's own calculation. It gets the highest weight.
Higher: 4.75% to below 5.25%, that is 4.75% or 5.00% on the usual steps
On the usual steps, this means a net increase of 0.75 to 1.00 points from today's level, or 1.00 to 1.25 points above the end-2025 level, on the Centre's own calculation. No participant projected a value in this band in September 2026, but two voting members preferred an increase in October, and inflation was projected at 3.7% for 2026. It would follow if inflation stays well above the 2% goal through 2027. The weight is moderate.
Much higher: 5.25% or more
This means a net increase of at least 1.25 points from today's level, or at least 1.50 points above the end-2025 level, on the Centre's own calculation, across seven rate-setting meetings in 2027 and one in December 2026. It would need inflation to rise further. No participant projected this, so the weight is low. The committee's median projection for the end of 2027, 4.1%, is the midpoint of a 4.00% to 4.25% range, so it corresponds to an upper bound of 4.25%, on the Centre's own calculation. That falls in the most-weighted band, band 3.
What to watch
- The December 2026 meeting: on 8 and 9 December 2026, with new projections from the committee, including its first update of the end-2027 median since September.
- Inflation: monthly consumer price and personal consumption price data, against the committee's projection of 2.3% inflation in 2027.
- Dissents: whether more members vote for an increase, or for a cut.
- The 2027 calendar: which 2027 meeting is set aside for strategy, and any change to the schedule.
- The UAE base rate: which moves in step with US decisions on the rate paid on reserve balances.
Figures as of 30 October 2026. Probabilities are analytical estimates by the Ghaf Centre for Studies & Research.