IGA CAPITAL WEEKLY ECONOMIC BRIEF
- Joshua Hawley
- Oct 22
- 3 min read
WEEK OF OCTOBER 20, 2025
A Decelerating Global Rate Cycle Meets UAE's Exceptional Liquidity
The global financial landscape this week reaffirms the bifurcation of capital flows, with policy-sensitive Western markets embedding aggressive rate cuts while commodity-backed regional economies maintain superior liquidity and lending stability. The fundamental thesis of the 2025 de-rate cycle continues to unfold, providing a sustained tailwind for asset valuations and structured debt strategies.
Global Rate Normalization & Market Expectations
The market has priced in an accelerated path toward lower rates, reflecting a consensus that the Federal Reserve's tightening cycle has concluded.
Fed Funds Implied Rate: The probability for the Fed Funds Rate to be in the 3.75%-4.00% range for the October 29, 2025 FOMC meeting is now over 90%. The implied policy rate is projected to fall to a profoundly stimulative 3.10% by mid-September 2026, significantly undercutting the Federal Reserve's own long-run median projection.
Yield Curve & Credit: The 10-year UST yield has stabilized near 4.01% , with the 2s/10s spread firming at 0.55%4, indicative of a rational market anticipating a soft-landing scenario and subsequent monetary easing. This is further validated by the decline in the 1-Month Term SOFR rate to 4.024%.
Eurozone Funding: The Eurozone's cost of capital remains exceptionally favorable for corporate funding, with the 3-Month EURIBOR recently holding just above 2.0%, enabling European clients to proceed with high-margin international project finance.
The UAE Economic Exceptionalism: Liquidity and Growth Trajectory
The UAE, anchored by the U.S. Dollar peg, remains insulated from the short-term volatility of US monetary policy shifts. The EIBOR benchmark, directly tied to the Dirham's peg, has provided rate stability that underpins the current lending boom, particularly in Dubai's real estate sector.
EIBOR and Cost of Capital: The 3-Month EIBOR rate, the reference point for local commercial loans, currently trades near 3.99%, remaining predictable. This stability ensures that the effective cost of borrowing (EIBOR + margin) remains highly attractive relative to global counterparts.
Dubai Real Estate Dynamics: The market is characterized by strong institutional conviction, leading large local banks to aggressively seek high-quality real estate opportunities, including residential, commercial, and mixed-use towers. This is not merely opportunistic lending but a strategic reallocation of liquid capital to a robust domestic asset class.
Lending Parameters & IGA's Advantage:
Terms: Loan terms for construction finance are offered at highly competitive rates of EIBOR + 3-4%.
Contribution: Banks require a reasonable promoter contribution of 25-30%.
IGA Capital’s Role: Our exclusive relationship with prominent UAE commercial lenders translates directly into optimal, non-dilutive financing for our clients, often resulting in an accelerated funding timeline of 1-3 months. This positioning is critical for maximizing returns in a time-sensitive, high-demand market.
Commodity & Digital Asset Velocity
The sustained rally in hard assets suggests a deep-seated apprehension regarding fiat stability and global geopolitical risk.
Precious Metals as a Capital Hedge: The price of Gold has surged to $4,251.89 (+16.7% 1M) , and Silver climbed to $51.86 (+24.0% 1M). This dual-asset velocity signals that non-fiat, tangible asset exposure remains a core strategic hedge against systemic uncertainty.
Digital Assets: As of today, October 22, 2025, Bitcoin (BTC) is trading near $114,800. The digital asset class continues to validate its role as a strategic macro-asset, consolidating at high valuations despite global volatility.
Disclaimer: This economic brief is intended for discussion and strategic purposes only and is not a recommendation to buy or sell securities. All market data is based on information available as of October 21, 2025, from Bloomberg via Walker & Dunlop and confirmed external sources.
Footnotes and Disclosures:
Sources: Walker & Dunlop , CME Group, Central Bank of UAE/Financial News, IGA Capital Brief, Real-time Crypto Exchange Data.
EIBOR Data (October 14, 2025): Central Bank of the UAE
General Market Context: IGA Capital Brief, Fed News
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