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DO FISCAL STIMULUS MEASURES SUPPORT THE US MARKET GROWTH, AND IS A DEFAULT POSSIBLE?
Authored by Michael Smirnow, Chief Investment Officer, Arabian Capital Gulf
With the dirham pegged to the US dollar and UAE investors exposed to global markets, decisions made by the Federal Reserve and the US government can influence local borrowing costs, liquidity, and investment sentiment. Michael Smirnow, Chief Investment Officer, Arabian Capital Gulf After the global financial crisis, U.S. authorities tried to stimulate the economy primarily through monetary measures: the Federal Reserve cut interest rates to zero and launched quantitative easing (QE) for the first time, purchasing assets to provide market participants with liquidity.
As a result, the Fed’s balance sheet grew to USD 8 trillion by 2021. However, between 2008 and 2020, the U.S. economy did not experience rapid growth, and inflation regularly remained below the target level. Everything changed in 2020, when the government entered the stimulus fray for the first time in many years. While the Fed’s accommodative monetary policy primarily helped large banks and market participants, at the onset of the pandemic the U.S. government began distributing money to households and increasing budget expenditure across nearly all areas.
Compared with monetary measures, these fiscal stimulus measures proved to be a significantly more powerful tool for stimulating the economy; however, they increased government debt by the aforementioned 61%. Against this backdrop, we expect the next few years to be shaped primarily by fiscal stimulus, with government action, rather than the Federal Reserve, becoming the key factor for investors. Indeed, while the private sector ran large deficits before 2008, the deficit now lies with the government, while private-sector indebtedness is declining. In the years following the pandemic, the largest government deficits coincided with the strongest growth in financial markets. This is unsurprising, since a public-sector deficit becomes private-sector income. This dynamic enabled the U.S. economy to remain resilient in 2023-2024 despite the Fed’s record pace of interest-rate increases. Whichever U.S. political party is in power will continue along this path; Trump is also doing the same through legislation known as the “Big Beautiful Bill.”
As long as inflation in the United States remains under control, this race will continue. The current balance between monetary and fiscal stimulus vividly illustrates this argument. On the one hand, the U.S. Federal Reserve is adopting an increasingly neutral stance and is clearly in no hurry to cut interest rates or introduce new stimulus programmes. On the other hand, the Treasury is entering the fray: as yields on long-term U.S. bonds confidently exceed 5%, the Treasury has launched a program to buy back its long-term debt. In effect, this gives the bond market the same kind of stimulus the Fed previously delivered.
Thus, the balance of power is changing, but the direction remains the same: the United States still needs accommodative monetary conditions. If these are not achieved through monetary measures, they will be achieved through fiscal ones.
(Arabian Gulf Capital (AGC) holds a Category-1 Investment Firm license issued by the Central Bank of Bahrain and provides tailored investment solutions to individual, corporate, and institutional clients.)
Who says your morning workout has to come with four walls? Level 43 Sky Lounge is teaming up with CRANK to bring an exhilarating rooftop cycling experience to Dubai, inviting fitness enthusiasts to start their day with an energising ride high above the city.
Taking place on the Level 43 helipad, A Morning Above the City combines the thrill of an outdoor cycling session with spectacular views of Dubai’s skyline as the city comes to life. Guests can choose from two morning sessions before enjoying a well-deserved breakfast at Level 43 Sky Lounge. With just four classes across two days and limited spaces available, this is one morning workout worth setting an early alarm for.
Details:
- Event: A Morning Above the City – Rooftop Cycling with CRANK | When: 31 October and 1 November 2026, 7:00 AM and 8:00 AM | Price: AED 200 per guest, including breakfast at Level 43 Sky Lounge | Highlights: Rooftop cycling on the Level 43 helipad, panoramic Dubai skyline views and post-workout breakfast | Availability: Four classes across two days, limited spaces | Location: Level 43 Sky Lounge, Four Points by Sheraton Sheikh Zayed Road | Reservations: Advance booking required via the event booking link
This Halloween, MOON Bar at SANA Restaurant invites Dubai’s night owls to step into the shadows for ECLIPSE AT MOON, an immersive evening of karaoke, themed cocktails, dance entertainment and a DJ afterparty on Saturday, 31 October.
Set within the intimate speakeasy at Jumeirah Mina Al Salam, Madinat Jumeirah, the event promises a playful take on Halloween nightlife, bringing together music, friendly competition and a dramatic eclipse-inspired setting.
The evening begins at 9:00 PM with open karaoke, inviting guests to take the microphone and perform their favourite tracks, from Halloween classics such as Michael Jackson’s Thriller to crowd-pleasers including Disturbia and Toxic. Those who prefer to share the spotlight can join the Scary Duet round, while competitions for Best Costume, Best Karaoke Performance and Best Duet add a competitive edge to the night. A secret guest appearance during karaoke will offer an additional surprise.
Special dance performances will build the energy throughout the evening before the focus shifts to the dance floor at 11:00 PM, when the DJ afterparty begins. The celebration continues until 2:00 AM, accompanied by atmospheric lighting and eclipse-inspired visuals.
The venue will be transformed with silver eclipse details, dark florals and moody lighting, creating a sophisticated Halloween setting. Costumes are encouraged but not compulsory. Guests looking for a subtler approach to the theme can opt for black, silver, charcoal grey, midnight blue or deep burgundy.
Food and drinks remain part of the experience, with SANA’s à la carte menu available at MOON throughout the evening, alongside specially created Halloween cocktails.
Whether guests are ready to take the stage, compete for the best costume or simply settle in for dinner, cocktails and late-night music, ECLIPSE AT MOON offers a Halloween night out with a distinctive speakeasy atmosphere.
This October, Acacia Lounge at Al Habtoor Grand Resort, Autograph Collection invites guests to enjoy a simple yet indulgent pairing of expertly brewed coffee and a delicate pink macaron.
Bathed in natural light and offering a relaxed setting, Acacia Lounge provides the perfect spot to pause and unwind over a freshly prepared coffee, accompanied by a petite pink macaron.
Available daily throughout October, the experience is priced at AED 38 per person. Date & time: Daily – throughout the month of October | 7:30am – 10:30pm | Price: AED 38 per person | Place: Acacia Lounge, Al Habtoor Grand Resort, Autograph Collection
Terrace Dining, Oktoberfest, and Beach Days Return to InterContinental Abu Dhabi This October
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