- GBP/USD fluctuates following the Fed’s rate decision, with focus shifting to Powell’s upcoming press conference.
- Fed’s division: Milan advocates for a 50 bps cut while noting concerns over rising inflation and slowed growth.
- The SEP suggests a potential 50 bps cut in 2025, shaping expectations for the Fed’s long-term path.
Following the Federal Reserve’s anticipated 25 basis point cut, GBP/USD climbed during the North American trading session, aiming to speed up further reductions towards year-end. At present, the pair is fluctuating between 1.3650 and 1.3700 as traders look forward to Chairman Powell’s press conference.
Fed acknowledges labor market concerns, Sterling strengthens; SEP hints at 50 bps cut by year-end
The Federal Reserve has expressed awareness of increasing risks within the labor market, indicating that while unemployment is low, it’s on the rise. The vote on the policy was not unanimous, with Governor Stephen Milan advocating for a deeper 50 basis point cut, resonating with what some analysts had anticipated.
On inflation, the Fed noted that price pressures are “moving up” and slightly increasing, while economic growth has tempered during the first half of 2025.
The Economic Forecast Summary (SEP) points to an additional 50 basis point cut expected by the year’s end.
