The Federal Reserve kicked off its campaign to lower interest rates with a larger-than-typical half percentage-point cut, while the Bank of England decided against a second consecutive reduction.

Sterling rose against a weakening dollar after the Federal Reserve cut interest rates by 50 basis points, with investors awaiting the outcome of the Bank of England policy meeting on Thursday expected to keep borrowing costs on hold.

The Fed slashed their interest rate forecasts even though their forecasts for core PCE inflation are not set to fall back to the Fed’s own target rate until 2026. The Fed has ditched waiting for inflation to fall back to target before aggressively starting their rate-cutting campaign.