British Pound Sterling collects a refund on the Fed hike that never came
Oleh Joshua Gibson
Diperbarui: 29 Jul 2026
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The Federal Reserve held its target range at 3.50% to 3.75% at 18:00 GMT on a 9-3 vote, with three voting members preferring an immediate quarter-point increase.
- GBP/USD spikes into the 1.3350 area on the Federal Reserve hold, a two-day high and the first clean reclaim of 1.3300 since the shelf broke.
- The Chair's press conference follows at 18:30 GMT with no projections attached, leaving the briefing as the only forward guidance on offer.
The Federal Reserve held its target range at 3.50% to 3.75% at 18:00 GMT on a 9-3 vote, with three voting members preferring an immediate quarter-point increase. Sterling read that as a refund rather than a warning, spiking roughly 40 pips into the 1.3350 area within minutes and printing its best level in two days. Futures pricing carried better than a third of a hike into the meeting, and that premium came out of the Dollar on the headline.
The briefing at 18:30 GMT carries the whole forward question, because this meeting attaches no Summary of Economic Projections and the statement retains the short form that struck forward guidance in June. Three dissents are the hawkish bloc putting itself on the record for the first time under this Chair, and a Chair who reads them as direction of travel takes this move straight back. September already carries roughly three-quarters odds of at least one increase.
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Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
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