Sterling edged higher on Wednesday, with GBP/USD trading near 1.3327, up 0.17%, after the Federal Reserve left rates unchanged despite a split vote. In comments after the decision, Fed Chair Kevin Warsh said the FOMC remains focused on delivering price stability and described the economy as strong. He added that the Fed plans eight meetings next year, though one will be held without a vote, and expects six policy-setting meetings in 2028.
Federal Reserve Decision and Economic Outlook
The Fed said economic activity is expanding, citing resilient domestic spending alongside strong productivity growth and robust capital investment. On employment, it said job gains have kept pace with the workforce and the unemployment rate has changed little. Inflation was described as still elevated, while the central bank opted to pause rate rises to gather more information on the appropriate policy stance; two officials dissented—Governor Lisa Cook and Cleveland Fed President Beth Hammack—preferring a 25-basis-point increase.
Sterling’s Global Position in Currency Markets
Separately, background figures put sterling at 12% of global foreign exchange transactions in 2022, averaging $630 billion a day, with GBP/USD at 11% of FX, GBP/JPY at 3% and EUR/GBP at 2%.
