The US Federal Reserve has raised interest rates for the first time in more than three years, increasing its benchmark rate by 25 basis points as policymakers seek to bring stubborn inflation back towards the central bank’s 2 per cent target.

The Federal Open Market Committee (FOMC) voted unanimously on Wednesday to increase the target range for the federal funds rate by a quarter percentage point to 3.75-4 per cent. The Fed said inflation “remains elevated”, while economic activity continues to expand at a solid pace.

The September 16 move represents the Fed’s first rate increase since July 2023, reversing the easing cycle that had brought borrowing costs down from their previous highs. The central bank said the latest increase would support a “timelier return” of inflation to its 2 per cent goal.

The decision comes amid renewed inflationary pressure, including higher energy costs linked to the Middle East conflict. Fed officials also signalled that further tightening could follow, with their latest projections showing a median federal funds rate of 4.1 per cent at the end of 2026, compared with 3.8 per cent projected in June.

The Fed now expects US personal consumption expenditures (PCE) inflation to stand at 3.7 per cent in 2026, slightly higher than its June projection of 3.6 per cent. Core PCE inflation, which excludes volatile food and energy prices, is projected at 3.4 per cent. Meanwhile, US GDP is forecast to grow 2.3 per cent this year, with unemployment at 4.1 per cent.

According to Reuters, financial markets reacted negatively to the decision and the prospect of additional increases. The Dow Jones Industrial Average fell 1.21 per cent on Wednesday, while the S&P 500 declined 0.45 per cent. US Treasury yields rose and the dollar strengthened as investors adjusted expectations for the path of monetary policy.

The impact is also feeding through to borrowing costs. Major US banks raised their prime lending rates following the Fed’s decision, increasing financing costs for businesses and consumers with loans linked to the benchmark.

As artificial intelligence moves from generating answers to taking actions, the security implications are becoming harder for businesses and governments to ignore.

On the sidelines of GISEC Global 2026 in Dubai, Gulf Business spoke with Amr Kamel, GM of Microsoft UAE, about the rise of agentic AI, the new cybersecurity risks created by autonomous systems and how organisations can maintain control as AI agents become embedded across critical workflows.

Kamel also discusses the UAE’s push towards large-scale AI adoption, the challenge of turning investment into measurable productivity, data sovereignty and how the relationship between AI and cybersecurity is likely to evolve over the next three years.

The UAE is moving quickly from generative AI towards agentic AI. What changes when AI systems are no longer simply providing answers but are able to make decisions and take actions on behalf of organisations?

The shift to agentic AI changes the role of AI inside an organisation. Generative AI primarily helps people create, analyse and retrieve information. Agentic AI can go further by reasoning across tasks, interacting with systems and data, and taking a sequence of actions towards a defined outcome.

This creates the potential for a fundamentally different operating model, where people and AI agents work together across business functions. But greater autonomy also requires stronger governance. Human judgement, accountability and oversight must remain central, particularly when agents are making decisions or acting on sensitive data and systems.

This is what Microsoft means by a ‘frontier organisation’: not simply an organisation that uses more AI, but one that redesigns workflows around human and agent collaboration, securely connects AI to organisational data and knowledge, and focuses on measurable outcomes.

The UAE is already moving in this direction at scale. Abu Dhabi Government, for example, has expanded Microsoft 365 Copilot across 35,000 employees, while initiatives such as TAMM AutoGov demonstrate how AI can evolve from supporting users with information to executing services on their behalf.

AI is giving cyber defenders more powerful tools, but it is also lowering the barriers for attackers. Where do you see the biggest new cybersecurity threat emerging as agentic AI becomes more widely deployed?

As agentic AI becomes more widely deployed, one of the biggest risks is that compromised or poorly governed agents can act across multiple systems at speed.

Many of the underlying threats are familiar, including identity compromise, excessive permissions, data leakage and malicious manipulation. What changes is the potential scale and speed of impact. An agent may be able to access applications, data and workflows, which means a single security weakness can have a much broader operational effect.

This is why identity, access control and visibility are becoming increasingly important in an agentic environment. Organisations need to know which agents are operating across their systems, what they can access, what actions they are authorised to take and how those actions are monitored throughout the agent lifecycle.

As companies deploy potentially thousands of AI agents across their operations, how do they control what those agents can access and do, and who ultimately remains accountable when an agent makes the wrong decision?

The principle should be the same one organisations already apply to people and applications: every agent should have a clear identity, defined permissions and an accountable owner.

As organisations scale the use of AI agents, they will need robust controls around authentication, least-privilege access, data permissions, monitoring and lifecycle management. Governance cannot sit outside the deployment model; it has to be designed into the way agents are created and operated from the outset.

Microsoft’s own Cyber Pulse research highlights identity, permissions, data access, governance and visibility as critical requirements for organisations deploying AI agents.

Ultimately, accountability remains human. AI agents may execute tasks and support decision-making, but organisations are still responsible for defining the objectives, policies, permissions and escalation points that govern their behaviour. The more autonomy an agent has, the stronger the requirement for transparency, oversight and clearly defined accountability.

Governments and businesses across the Gulf are investing heavily in AI. Are organisations moving quickly enough on security, governance and resilience, or is AI adoption currently running ahead of their ability to manage the risks?

In many organisations, AI adoption is moving faster than the governance structures around it. That is understandable because the technology is developing quickly and the barriers to experimentation are relatively low. But it also means security and governance maturity need to accelerate just as quickly.

The next phase of AI adoption cannot be measured simply by how many tools or agents an organisation has deployed. It has to be measured by whether those systems are secure, governed, resilient and delivering meaningful outcomes.

In the UAE, this is particularly important because AI is moving from experimentation into core government and enterprise operations. Microsoft’s view is that security, resilience, responsible AI and sovereignty are not separate considerations that can be added later. They are foundational requirements for trusted AI transformation at scale.

The UAE’s own direction reflects this maturity. Its ambition is increasingly focused on moving from isolated AI use cases towards systemic, agentic transformation, supported by governance, skills and institutional capability.

Microsoft has committed significant investment to AI infrastructure and skills in the UAE. Where do you see the biggest gap today: computing capacity, data, cybersecurity, AI skills or the ability of companies to turn AI investment into measurable productivity gains?

All of these elements matter, but the biggest challenge is increasingly the ability of organisations to turn AI capability into measurable business value.

Infrastructure and compute capacity are essential, but they are only part of the equation. Organisations also need modern and well-governed data, strong cybersecurity, skilled people and leadership teams that are prepared to redesign workflows rather than simply add AI onto existing processes.

That is why Microsoft’s investment in the UAE is broader than infrastructure alone. The company’s planned US$15.2 billion commitment between 2023 and 2029 spans cloud and AI infrastructure, local operations, skills and ecosystem development.

On skills, Microsoft has committed to equipping one million people in the UAE with AI skills by 2027, alongside broader initiatives focused on government employees, students, educators and the wider workforce. The priority is not only building technical capability but helping people apply AI effectively in their roles.

The focus now has to move from access to AI towards organisational absorption: whether companies can embed AI into real workflows, redesign how work gets done and convert investment into productivity, growth and better outcomes.

How do you expect AI agents to change the workforce in the Middle East over the next three to five years? Which jobs or functions are likely to change first, and where will human judgement remain essential?

AI agents are likely to change tasks and workflows.

Functions with high volumes of repeatable knowledge work are likely to evolve first. That includes areas such as customer service, software development, finance, HR, sales operations, research and administrative processes. In these areas, agents can increasingly handle multi-step execution, allowing employees to focus more of their time on judgement, problem-solving, relationships and higher-value work.

This is why Microsoft’s frontier organisation model is fundamentally human-led. The objective is not to remove people from the process, but to give them greater leverage by combining human judgement with AI capability.

Over time, skills such as domain expertise, critical thinking, creativity, leadership and the ability to orchestrate work across humans and AI agents will become even more important. Human judgement will remain essential wherever decisions involve ambiguity, accountability, ethics, trust or significant consequences.

Read: Core42’s Rajeev Nair on how AI governance and security are moving into the infrastructure layer

The Gulf wants to build sovereign AI capabilities while remaining connected to global technology platforms. How do you balance data sovereignty and national security requirements with the scale and innovation offered by global cloud infrastructure?

Data sovereignty and global innovation should not be treated as opposing choices.

For governments and regulated industries, sovereignty is fundamentally about control: control over where data is stored and processed, who can access it, how workloads are governed and how operational continuity is maintained.

The role of global cloud infrastructure is to provide the scale, security and pace of innovation that organisations need, while giving them the architectural and governance choices required to meet national and regulatory requirements.

This is the approach Microsoft is taking in the UAE. Microsoft operates cloud regions in Abu Dhabi and Dubai, is working with G42 and Core42 on sovereign cloud capabilities and has introduced in-country data processing for eligible Microsoft 365 Copilot interactions.

Microsoft’s sovereign technology portfolio also supports connected, intermittently connected and fully disconnected models, depending on the sensitivity and regulatory requirements of the workload.

The objective is therefore not isolation, but trusted choice: giving organisations the ability to benefit from global innovation while maintaining appropriate control over their data, systems and critical workloads.

If we meet again at GISEC in three years, what do you think will have changed most dramatically about the relationship between AI and cybersecurity?

The biggest change will be that AI and cybersecurity will no longer be treated as separate technology categories.

AI will increasingly be embedded on both sides of the security equation. Attackers will use AI to identify vulnerabilities, automate reconnaissance and adapt techniques more quickly. At the same time, defenders will use AI agents to correlate signals, investigate incidents, prioritise threats and respond at machine speed.

As this happens, the central security question will shift from simply protecting AI systems to governing autonomous action across the entire digital environment.

Microsoft is already moving in this direction. Its AI-native security work is focused on helping defenders detect, reason and respond at the speed of emerging agentic threats, while its broader security approach is extending identity, permissions, governance and visibility to AI agents.

In three years, cybersecurity will increasingly be about securing an operating environment in which people and AI agents are continuously working alongside one another.

The UAE-headquartered cybersecurity company Paramount Assure (Paramount) launched an artificial intelligence (AI)-powered security investigation assistant at GISEC Global 2026 on Wednesday, as companies look to AI to help security teams respond more quickly to increasingly complex cyber threats.

The company unveiled SoCMate at Microsoft’s stand at GISEC, at Dubai Exhibition Centre in Expo City Dubai.

Designed for security operations centre, or SOC, teams, SoCMate allows analysts to investigate incidents using natural-language questions rather than manually navigating security data or writing complex queries.

Paramount said the system connects information across security sources, builds context around potential attacks and recommends next steps while leaving critical response decisions under human control.

The platform is currently available for Microsoft Sentinel, according to the company

What SoCMate does

Paramount’s own product documentation says SoCMate can reduce investigations into lateral movement that would typically take two to four hours, and data-exfiltration investigations lasting four to eight hours, to about eight to 10 minutes.

“SoCMate is designed around this problem. Rather than asking analysts to move manually between security platforms, it allows them to query their security environment using natural language, correlate information across multiple sources and qualify incidents faster,” said Pradeep Menon, the company’s chief AI and security officer.

“Cybersecurity teams are also dealing with a skills constraint. The 2025 ISC2 Workforce Study found that cybersecurity professionals are increasingly identifying critical skills shortages as a greater concern than headcount alone. AI can therefore play an important role in democratising security operations, reducing the dependency on highly specialised query skills while allowing experienced analysts to focus their attention on the incidents that require human judgement,” says Menon.

ISC2’s 2025 study found that 59 per cent of respondents reported critical or significant cybersecurity skills needs, up from 44 per cent a year earlier. The organisation stopped publishing an overall workforce-gap estimate in 2025, saying respondents were increasingly placing greater emphasis on specific skills shortages than on headcount alone.

Menon said security operations centres were accumulating large volumes of information without necessarily being able to turn it quickly into an accurate picture of an attack. “Security operations centres (SOCs) are sitting on enormous amounts of data, but more data does not automatically mean better security. The real challenge is connecting signals across different security platforms, understanding which ones matter and turning them into an accurate picture of what is actually happening,” he said. “Moving into the years ahead, SOCs will increasingly need to operate at machine speed while retaining human oversight. The organisations that can combine AI-driven analysis with experienced security professionals will be better positioned to detect, investigate and respond to threats as the attack window continues to shrink.”

The launch comes as AI is increasingly being used on both sides of the cybersecurity contest.

Impact of cyberattacks

IBM’s 2026 Cost of a Data Breach Report said AI-driven attacks increased 56 per cent from the previous year, while the global average cost of a data breach rose 12 per cent to a record $4.99 million. Organisations making extensive use of AI and automation in security recorded average savings of $1.93m compared with those that did not, IBM said.

The UAE is also dealing with sustained cyberattack volumes. In February, Mohamed Al Kuwaiti, head of the UAE Government Cybersecurity Council, told state news agency WAM that the country’s infrastructure was facing between 90,000 and more than 200,000 breach attempts each day. More recent Cybersecurity Council data cited by WAM said the national cyber operations centre monitors more than 200,000 attacks a day, with volumes rising to between 600,000 and 700,000 during periods of crisis.

Premchand Kurup, CEO of Paramount Assure, said increasing attack volumes were making cybersecurity a broader business resilience issue. “As cyber threats become more sophisticated, businesses are dealing with an expanding volume of security signals while also facing pressure to respond faster.”

Kurup said, “This is where AI needs to move from being another layer of technology to becoming a practical force multiplier for security teams. We launched SoCMate at GISEC 2026, available for Microsoft Sentinel, to help analysts move from large volumes of fragmented security data to actionable intelligence more quickly.

“Instead of requiring teams to manually navigate multiple platforms or write complex queries, analysts can run queries with SoCMate in natural language and investigate incidents across their security environment. The objective is not to replace cybersecurity expertise, but to make that expertise more effective, reduce investigation time, enabling organisations to respond to threats before they become larger business disruptions.

“For government entities and businesses in the MENA region, this shift is particularly important as cybersecurity becomes a board-level resilience issue rather than simply an IT concern. AI-powered SOC automation can help organisations make continuous monitoring and faster incident response more practical, scalable and accessible.”

According to the company, SoCMate was designed to work alongside existing SOC infrastructure rather than requiring organisations to replace their security technology. Its product documentation says analysts can use natural-language prompts to identify relevant security data, correlate historical and behavioural information and produce qualified findings with recommended actions.

Paramount Assure, founded in 1992, operates across the Middle East and provides cybersecurity services to businesses and government organisations. Its website currently lists more than 400 customers and more than 575 security experts.

Read: The end of the password? GCC cybersecurity leaders sound the alarm on identity’s new frontline

Oil prices fell on Wednesday as reports that Saudi Arabia was offering additional crude cargoes via Oman eased concerns about the scale of Middle East supply disruptions, while European diesel prices hovered near a record high.

Brent crude futures were down $1.69, or 1.55 per cent, at $107.06 a barrel by 1128 GMT, while US West Texas Intermediate futures were down $2.6, or 2.46 per cent, at $103.23 a barrel.

In the previous session, oil prices settled more than $3 higher after shipping industry sources said crude loadings at Saudi Arabia’s Red Sea export hub of Yanbu had been suspended and Riyadh had cancelled some cargo deliveries to European customers, deepening concerns that disruptions to a critical export route could persist for weeks.

Read more: Sri Lanka opens four offshore oil and gas blocks to investors

However, Saudi Arabia is offering more loadings of crude oil to Asian refiners via ship-to-ship transfer off Oman’s Sohar port after drone attacks damaged its oil pipeline to the Red Sea, people familiar with the matter said.

“News around Saudi Arabia exporting from the Gulf suggests concerns that the disruption could be larger are easing,” said UBS analyst Giovanni Staunovo.

Visible vessel transits through the Strait of Hormuz remained in the single digits at four on Tuesday, down from seven a day earlier, preliminary shipping data showed on Wednesday. That was well below the 10-day average of 18.

The waterway handled a fifth of the world’s oil and liquefied natural gas supply before the US-Israeli war on Iran began in late February.

Macquarie analysts said flows of crude, condensate and refined products through the Strait of Hormuz had remained resilient despite escalating hostilities in the region and may have risen to more than 7.5 million barrels per day since fighting resumed on August 30. They said the link between developments in the strait and oil flows had weakened.

Citi expects near-term escalation in the Middle East to continue supporting crude oil and refined fuel prices before the Strait of Hormuz eventually reopens in the fourth quarter of 2026 with support from regional diplomatic efforts, the bank said in a note.

Diesel tightness persists

European gasoil futures, a benchmark for diesel prices, rose to their highest intraday level since April on Tuesday before settling at a record high, underscoring tightness in fuel markets, although they also eased on Wednesday.

“Diesel’s strength reflects a product-specific shortage layered on top of expensive crude,” said Frank Walbaum, market analyst at Naga.com.

“Europe has lost substantial diesel and jet-fuel supply from the Middle East, while ongoing tensions in Eastern Europe have disrupted output at several major Russian refineries and prompted Moscow to restrict fuel exports.”

Last week, the US national average price of diesel surpassed $6 a gallon for the first time ever.

The Russian government has decided to extend restrictions on diesel exports for fuel producers until the end of October, Vedomosti daily reported late on Tuesday, citing two unidentified sources.

“I would expect, unless there is a peace deal or an improvement in the situation in Russia, that diesel prices stay supported,” UBS’ Staunovo said.

US Inventories weigh

US crude oil, gasoline and distillate inventories all rose last week, market sources said on Tuesday, citing data from the American Petroleum Institute.

Crude inventories rose by 7.1 million barrels in the week ended September 11, the sources said, citing API data. That compared with analysts’ expectations for a draw of about 1.6 million barrels, according to a Reuters poll.

Dubai has approved the implementation of the New Fourth Corridor, an 80km road project designed to strengthen the emirate’s transport network and improve connectivity between Abu Dhabi, Dubai and Sharjah.

HH Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, Deputy Prime Minister and Minister of Defence, said he approved the project in line with the directives of HH Sheikh Mohammed bin Rashid Al Maktoum to increase investment in infrastructure.

The new corridor will extend approximately 80km from Al Faya Road in Abu Dhabi to Al Shanouf Road in Sharjah and will feature 12 lanes in both directions. According to details shared by Sheikh Hamdan, the project will include 72 bridges and 17 tunnels.

Once completed, the corridor is expected to reduce journey times by up to 60 per cent and have capacity for 24,000 vehicles per hour in both directions. It is expected to serve more than 3.1 million people.

The project will also support integration with Al Maktoum International Airport and Etihad Rail, strengthening links between Dubai’s road infrastructure and the wider UAE transport network.

Fourth Corridor to be delivered in two phases

The New Fourth Corridor will be implemented in two phases. The first will extend from Al Shanouf Road in Sharjah to Dubai-Al Ain Road and is expected to cost around Dhs3.5bn.

The second phase will extend from Dubai-Al Ain Road to Al Faya Road in Abu Dhabi. No cost for the second phase was disclosed in the announcement.

“This project reflects our continued commitment to investing in infrastructure as a driver of economic growth, a foundation for enhancing quality of life, and a key pillar of Dubai’s readiness for the future,” Sheikh Hamdan said.

The project adds another major cross-emirate transport link as Dubai continues to expand road capacity and connectivity alongside the development of Al Maktoum International Airport and the UAE’s Etihad Rail network.