GBP/USD remains attached to 1.3000 after Fed rate hold

• GBP/USD continues to anchor near 1.3000 after Fed keeps rates steady.
• Despite generally acknowledging that risks have increased, the Fed is still set to deliver two more rate cuts in 2025.
• Markets are betting that the next quarter-point rate trim will come in June.

GBP/USD remained pinned to recent highs near the 1.3000 handle on Wednesday, with market sentiment bolstered into the high side after the Federal Reserve (Fed) held steady on its plans to deliver more rate cuts in 2025, albeit later in the year. Rate markets are still pricing in another quarter-point cut from the Fed at the US central bank's June meeting, and Fed Chair Jerome Powell reiterated that the Fed still strong growth and a healthy labor market underpinning the US economy.

However, not all is rosy in the Fed's outlook: Fed policymakers have trimmed their growth outlook for the year, with US Gross Domestic Product (GDP) growth to slow to just 1.7% through 2025, several points below December's forecast of 2.1%. Fed Chair Powell also nodded a head at downside risks at the hands of the Trump administration's trade policies, however the Fed thus far continues to bet that inflationary effects from global tariff-fueled trade wars will be mild and temporary.

The Bank of England (BoE) is up next with their own interest rate call during Thursday's European market session. Market fireworks will be notably thinner as the BoE is slated to again stand pat on interest rates for the time being.

Friday will close out the week with mid-tier UK GfK Consumer Confidence, expected to dip further into the negative and forecast to clock in at -21.0 versus the previous print of -20.0. 

GBP/USD price forecast

GBP/USD continues to churn chart paper at the top end of near-term price action. Bids remain trapped near the 1.3000 major technical handle, and Cable is on pace to close higher for a third straight week.
The pair is trading into four-month highs, a mere third of a percent away from cracking into its highest levels since last October.

GBP/USD daily chart