GBPUSD TECHS: Maintains A Softer Tone

Our FOMC Hawk-Dove Spectrum has shifted since pre-June FOMC to reflect some of the latest commentary on future easing. This is based in part on where we think (or in the case of Bostic and Kashkari, we know) they penciled in end-2026 rates in the June SEP (recall the median was 3.6%).

• We had to pick a "1 cut through end-2026" candidate and that is probably Logan, Hammack or Schmid - we guess the latter.
• Likewise despite Goolsbee not being the biggest dove for 2025, we think he probably continues to have the most dovish rate profile overall, with Bowman and Waller conversely front-loading their cuts.
• The Board is likely split largely between 3.4% and 3.6% end-2026, implying that most are eyeing 1-2 cuts in 2026 on top of 2 cuts by end-2025.

The MNI Markets Team's educated "guess" as to the June SEP submissions for the 2025 end-year dot is below. Note the median for end-2025 is 3.9% (2 cuts).

• Kashkari and Bostic have publicly revealed their "dots" for 2025 (and the case of the latter two, 2026), while Daly and Collins have implied theirs.
• Most of the Board are in the 2-cut median camp. Governors Cook and Jefferson haven't commented on monetary policy since the June FOMC meeting. At a guess, Gov Kugler is only board member who doesn't eye cuts this year, though that could also be Gov Barr, or Gov Cook who said pre-June FOMC that all possibilities, including hikes, were possible.
• Two of the more hawkish members, St Louis's Musalem (2025 voter) and Dallas's Logan (2026 voter) also haven't spoken on current monetary policy since the June meeting, though are scheduled to make relevant commentary on July 10 and July 15, respectively. We assume they are "no-cutters" for this year.
• We also haven't heard from new Philadelphia Fed President Anna Paulson (2026 voter) yet, though her predecessor Patrick Harker could easily have been any of 1, 2, or 3 cuts for 2025. We have him here as a rate-cut skeptic (in his last public appearance he suggested that the direction of the next move rates itself was a question).

• According to Rabobank, growth momentum has appeared to be sapping despite the better than expected 0.7% Q/q rise in GDP in Q1. April brought the double whammy of a range of price hikes in the UK and higher national insurance contributions by firms plus the disruption created by Trump’s tariff announcements.
• While UK business confidence subsequently found some support from the trade agreements reached with the US and India, in recent weeks data have hinted at a loosening labour market and softening in consumer spending. It is Rabo’s view that the BoE will cut rates in August and potentially again in November.
• By contrast the ECB has signalled that it has neared the end of its cycle, with headline inflation in the Eurozone back at 2%. The broad-based EUR’s gains this year indicates that a lot of good news has been priced in.
• While this suggests that the single currency may be subject to bouts of profit-taking, Rabo would favour buying EUR/GBP on dips towards their 0.87 target.