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Fed hikes by 0.75%, over to the BoE

Today's news headlines:

‘Powell Sets Path to Restrain Economy and Stop Runaway Inflation’. The Federal Reserve raised interest rates by 75 basis points in yesterday’s meeting, which was the largest hike by the central bank since 1994, as it tries to contain rising prices. Chairman Jerome Powell emphasised that restrictive monetary policy will continue, raising recession risk and the likelihood of a strong labour market unravelling. Policymakers' growth projections remain downbeat as forecasts for rising joblessness heading into 2023/24 and a 3.8% policy rate by the end of 2023 also point to a recession. (Bloomberg)

‘BOE Set for Steady Rate Hikes Amid Global Chaos’. The Bank of England is expected to push interest rates to a 13-year-high of 1.25% today, with a 25-basis-point hike anticipated. With inflation currently sitting at 9% and a belief that we’ve not yet hit the peak, analysts suggest a 50-basis-point hike is a real possibility. However, concerns about the economy are evident, with Gross Domestic Product contracting in April as wages struggle to cover the rising cost of living. (Bloomberg)


Asian stocks were mixed overnight as markets digested the latest Fed decision. The US Dollar is trading higher this morning while Sovereign bond yields have pared gains. European shares have opened in the red while US equity futures point lower. Oil prices have ticked higher, with Brent holding below $120 per barrel.


Australian Employment Change (May): 60.6K (est. 25K)
Australian Unemployment Rate (May): 3.9% (est. 3.8%)
Bank of England Monetary Policy Decision: 12:00PM
US Housing Starts (May): 1:30PM
US Philly Fed Manufacturing Index (June): 1:30PM
US Initial Jobless Claims (June 11th): 1:30PM

Interbank rates:

GBP/USD – 1.2074
GBP/EUR – 1.1609
EUR/USD – 1.0400
USD/CAD – 1.2943

The markets are moving. To speak to our team, please call +44 (0)20 3465 8200.