The US Federal Reserve is moving to stabilize interest rates at its scheduled meeting on Tuesday and Wednesday, days before the midterm congressional elections, at a time when inflationary pressures are increasing due to rising energy prices and the repercussions of the war on Iran, while markets await signs of the timing of the resumption of monetary tightening.
The decision comes amid increasing political sensitivity towards the cost of living, and continued pressure from President Donald Trump on monetary policy, while the central bank faces a difficult equation between containing inflation, which is still higher than its target of 2 percent, and avoiding tightening monetary policy at a pace that might put pressure on the labor market.
In light of these data, the markets’ follow-up will not stop at Wednesday’s decision, but will extend to the economic data scheduled to be issued the next day, which may help determine the path of interest during the coming months. On Thursday, data on the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred measure for measuring inflation, will be released, along with the preliminary reading of the gross domestic product in the third quarter, providing additional indicators regarding the continuation of price pressures and the strength of economic activity.
The Federal Open Market Committee is scheduled to announce its decision on Wednesday, after a two-day meeting. Estimates of the CME Group's Fed Watch tool indicate that markets are not likely to raise interest rates by a quarter of a percentage point at the current meeting, as the probability of this step is estimated at about 10 percent, while a rate increase in December remains on the table if inflation continues above target levels.
The Federal Reserve Board raised the target range for the federal funds rate in September to between 3.75 and 4 percent, the first increase in 3 years. This comes at a time when inflationary pressures remain high, despite fears that additional monetary tightening will slow economic activity and weaken the labor market.
Inflation exceeds target
The Federal Reserve faces a renewed challenge in restoring inflation to its target level, after price pressures declined significantly following the wave of rise that the US economy witnessed after the “Covid-19” pandemic. The personal consumption expenditures price index peaked at 7.2 percent in 2022, before interest increases contributed to reducing it to about 2.2 percent by the end of 2024.
But inflation returned to rise in light of the customs duties imposed by the administration of US President Donald Trump and the repercussions of the war on Iran, recording 3.9 percent in May.
The latest PCE price index data available for August showed headline inflation rising to 3.4 percent year-on-year, while core inflation, which excludes food and energy prices, was 3 percent. Thus, the two indicators remained higher than the Fed’s target, according to the US Bureau of Economic Analysis.
Meanwhile, CPI data for September showed prices rose 3.7 percent year-on-year, compared to 3.4 percent in August, while they rose 0.6 percent month-on-month. Core inflation also recorded an annual increase of 2.6 percent, according to figures based on an analysis published by the “Daily Economics” Institute on October 23.
The pressures are not limited to energy, as the analysis indicated an increase in the prices of some goods and services associated with investment in artificial intelligence, in addition to an increase in the costs of services, including hospital services, car maintenance, and dining outside the home. The breadth of the increases reinforces concerns that inflation is too entrenched to be attributed to supply disruptions alone.
Thursday's data...a new test for the markets
Thursday's data is particularly important because it will be released one day after the interest rate decision, which means that Fed officials will not have seen the September reading of the personal consumption expenditures index before their meeting.
Market estimates, reported by CMC Markets, expect general inflation according to the index to rise by 0.5 percent on a monthly basis in September, compared to 0.3 percent in August, and to increase to 3.6 percent on an annual basis, compared to 3.4 percent.
As for core inflation, it is expected to rise by 0.3 percent on a monthly basis, compared to 0.2 percent in August, and to reach 3.1 percent on an annual basis, compared to 3 percent.
If the data is consistent with these expectations, it will reinforce fears of continued inflationary pressures, and increase the importance of the signals that Fed Chairman Kevin Warsh will provide regarding the next steps. But the actual reading, along with details of the index components and reviews of previous data, will determine the extent of its impact on monetary policy expectations.
On the same day, the preliminary estimate for US gross domestic product in the third quarter will also be released, putting the markets before a double test of the path of inflation and the strength of economic activity. The third estimate of GDP in the second quarter showed nominal growth of 8.5 percent, while real output growth was revised upward to 2.2 percent.
The GDB Now model, affiliated with the Federal Reserve Bank of Atlanta, also indicates real GDP growth of 3.6 percent in the third quarter, according to the reading indicated in the economic analysis published on October 23.
Monetary policy rules suggest further tightening
A set of economic rules used to evaluate monetary policy suggests that interest rates may need to rise if inflation remains above target and nominal spending remains strong.
The US Institute of Economic Research's Monetary Policy Rules Index shows that some models, including a modified version of the Taylor Rule and a rule based on the level of nominal GDP, indicate an interest rate of about 3.8 to 4.1 percent, a range close to the current level.
In contrast, other formulas, including the original “Taylor rule” and the nominal GDP growth rule, indicate levels exceeding 5 percent. According to estimates by the Federal Reserve Bank of Cleveland, the rate recommended by the “Taylor Rule” may reach about 5.7 percent in the third quarter of 2026, while other rules provide lower estimates. These differences reflect different assumptions related to inflation and economic activity, and confirm that monetary rules provide guiding indicators for policy makers, not binding prescriptions for decisions.
The Federal Reserve estimates issued in September indicated expectations that general inflation according to the personal consumption expenditures index would reach 3.7 percent by the end of 2026, and core inflation would reach 3.4 percent. It also expected the unemployment rate to remain near 4.1 percent, and indicated an additional increase in the interest rate by a quarter of a percentage point according to the intermediate path of participants’ expectations.
These estimates reflect continued concerns about inflation, even after excluding food and energy prices, which are more vulnerable to geopolitical fluctuations.
The labor market limits the speed of tightening
On the other hand, labor market conditions do not appear to have deteriorated enough to require a rapid shift toward a more accommodative monetary policy, despite the slowdown in employment. September data showed that only 29,000 jobs were added to non-farm jobs, while the unemployment rate reached 4.2 percent.
This puts the central bank in front of a difficult equation: raising interest rates may help curb demand and inflation, but it may increase financing costs and put pressure on companies, spending, and employment. As for fixing interest rates, it gives officials time to evaluate the impact of the war on Iran on prices, but it may leave inflationary pressures in place for a longer period.
Loretta Mester, former president of the Federal Reserve Bank in Cleveland, told Agence France-Presse that the data still indicates stability in the labor market and inflation remaining above target, usually because economic data supports continuing to raise interest rates. But she indicated that some monetary policy makers may prefer to wait before implementing a new increase.
For her part, Wendy Edelberg, a senior researcher at the Brookings Institution, believed that avoiding involvement in political disputes before the US midterm elections is in the interest of the central bank, noting that postponing the interest rate hike from October to December will not necessarily have major economic repercussions.
Warsh in front of the market guidance test
In addition to the interest rate decision, investors are awaiting Warsh's press conference; Searching for signals regarding the timing of the next step, especially in light of the difference in opinions regarding the urgency of raising interest rates.
Michael Pearce, chief US economist at Oxford Economics, said that indicators support the need to continue raising interest rates in the near term, but statements by some officials suggest that they are not likely to implement an increase at the October meeting.
David Merkel, chief American economist at Goldman Sachs, pointed out that the statements of Fed officials suggest that the increases may take place in successive meetings with one meeting interval, which places December and March among the possible dates for the next two steps.
In turn, Ruchir Sharma, an economist at Nomura, expected that Warsh would avoid providing direct guidance on future decisions, but he may hint at support for raising interest rates in December through his assessment of inflation data and financial conditions.
The importance of these signals increases in light of the pressure exerted by Trump on the Central Bank to reduce interest rates, and his previous criticism of his former Chairman, Jerome Powell. It also comes amid disagreements over the independence of the Federal Reserve, after the criminal investigation targeting Powell, and attempts to dismiss Conservative Council member Lisa Cook.
While stabilizing interest rates in October appears to be the option closest to market expectations, Thursday's data will remain a pivotal factor in determining whether inflation is heading to rise further, or price pressures have begun to decline, allowing the central bank to wait. Until then, the possibility of a rate hike in December remains, but it will depend on the path of economic data and monetary policymakers' assessment of inflation and growth risks.
Dr. Sulaiman Al Habib Medical Services Group raised its net profits during the first nine months of 2026 by 5.6 percent to 1.85 billion riyals ($493 million), compared to about 1.75 billion riyals ($467 million) in the same period last year, supported by revenue growth and high levels of operational activity.
The group's preliminary financial results, published on Sunday, showed an increase in revenues during the period ending September 30, 2026, by 15.4 percent to 11.54 billion riyals ($3.08 billion), compared to 10.01 billion riyals ($2.67 billion) in the corresponding period of 2025, an increase of 1.54 billion riyals ($410 million).
Revenue growth was mainly driven by the performance of the hospital and pharmacy sectors, with an increase in the number of visitors and occupancy rates in hospitals, and this was reflected in pharmacy sales, in addition to an increase in revenues from the solutions sector. The continued growth of hospitals that entered service as part of the recent strategic expansions also contributed to supporting performance, even though these projects are still in the phase of accelerating operational growth and gradually moving towards optimal use of their capacity.
High quarterly profits
In the third quarter of the current year, the group’s net profit increased by 13.2 percent to 681.6 million riyals ($181.8 million), compared to 602.28 million riyals ($160.6 million) in the same quarter of last year, while revenues increased by 18.4 percent to 4.10 billion riyals ($1.09 billion), compared to 3.46 billion riyals ($923.6 million) in the period. Same as 2025.
On a quarterly basis, net profit increased by 2.9 percent compared to the second quarter of the current year, in which the group recorded profits amounting to 662.66 million riyals ($176.7 million), while revenues grew by 2.4 percent, from 4.01 billion riyals ($1.07 billion) to 4.10 billion riyals ($1.09 billion).
The group attributed the improvement in quarterly profits to revenue growth and high levels of operational activity, which enhanced its ability to cover fixed costs, with continued gradual improvement in benefiting from the added absorptive capacity.
Improving operating profits
The group's operating profit during the first nine months increased by 11.4 percent to 2.16 billion riyals ($575.2 million), compared to 1.94 billion riyals ($516.4 million) in the same period last year. Total profit also increased by 9.2 percent to 3.43 billion riyals ($915.4 million), compared to 3.14 billion riyals ($838.5 million) in the corresponding period.
Profit before interest, taxes, depreciation and amortization during the period recorded 2.97 billion riyals ($793.1 million), an increase of 16 percent from 2.56 billion riyals ($683.8 million) in the first 9 months of 2025. The margin of this profit reached 25.76 percent, compared to 25.63 percent in the similar period of the previous year.
During the third quarter, profit before interest, taxes, depreciation and amortization increased by 21.2 percent to 1.08 billion riyals ($287.5 million), compared to 889.77 million riyals ($237.3 million) in the same quarter of last year, while the profit margin improved to 26.29 percent from 25.69 percent.
Continuous growth with business expansion
The results reflect the continued growth of the group's business in conjunction with its expansion in the healthcare sector. The company explained that the hospitals that began operation as part of its strategic plan are still in the stage of escalating activity, while gradually progressing towards making optimal use of their capacity.
Earnings per share during the first 9 months amounted to 5.28 riyals ($1.41), compared to 5 riyals ($1.33) in the corresponding period of 2025. Total ownership rights, after excluding non-controlling interests, also increased to 8.48 billion riyals ($2.26 billion), compared to 7.68 billion riyals ($2.05 billion) in the corresponding period.
