Despite the uncertainty surrounding the US Presidential Elections and recent economic indicators in the US showing a downturn in key economic metrics, the UAE economy has remained robust, with the latest year-over-year CPI dropping from 3.91 percent to 3.81 percent in the second half of the year, according to data.

Simultaneously, the US year-over-year CPI has decreased from 3.4 percent to 3.3 percent. Anticipating a slow growth in commodity prices, wages, and rents, along with an appreciation of the UAE dirham due to a strong US dollar, which could further moderate inflation levels, the Central Bank of the UAE revised its 2024 inflation forecast from 2.5 percent down to 2.3 percent in its June 2024 outlook.

Razan Hilal, a market analyst at Forex.com, commented: "Given these factors and the array of global economic uncertainties, the UAE economy remains resilient, displaying strong capital adequacy ratios, growing foreign investments, and a diversified economic base." The country is on track to meet the CBUAE's growth projection of 3.9 percent for 2024 and over 6 percent in 2025. Despite the bullish market sentiment fostered by current economic developments, it is important to note that the November US elections could potentially alter this trajectory, necessitating a cautious economic outlook for the UAE.

In the US, key statistics indicate disinflationary trends, including declining consumer price inflation figures and the PCE, the Fed's preferred inflation measure, hitting a three-year low. The ISM Manufacturing PMI has seen three consecutive declines below expectations, while the ISM Services PMI has fallen from its nine-month high to pandemic-era levels. However, recent Fed statements emphasize the need for more data to confirm these trends, warning that premature rate cuts could rekindle inflationary pressures. As data aligns with the Fed's inflation target, the S&P 500 and Nasdaq have reached record highs, and the UAE MSCI has experienced a positive rebound over three weeks from annual lows.

Regarding the impending US presidential elections, the impact on inflation remains uncertain. If Donald Trump is re-elected, inflation levels could deviate significantly from current trends, as suggested by Reuters and 16 Nobel Prize-winning economists.