Three of the Bank of England’s more dovish members decided against another immediate interest-rate cut, as the panel held policy steady in the face of a turbulent global backdrop.
The Monetary Policy Committee voted 8 to 1 in favor of leaving the benchmark policy rate at 4.5%, with more policymakers favoring a cautious approach than had been expected by economists. It put support for an immediate reduction at the lowest in six months.
Traders trimmed bets on a rate reduction in May. Swaps pricing implied around a 65% chance of a quarter-point cut in May, compared with 70% before the decision.
“The vote split of 8-1 was hawkish for the market looking for 7-2,” said Jordan Rochester, head of FICC strategy at Mizuho Bank Ltd., while adding that BOE Governor Andrew Bailey had been playing down the significance of the vote split.
Two rate-setters that have supported lower borrowing costs at the previous three meetings — Deputy Governor Dave Ramsden and Alan Taylor — voted for no change in policy, as did Catherine Mann who shocked markets by backing a bumper half-point reduction in February. Arch-dove Swati Dhingra voted for a quarter-point cut, scaling back her call for half a point.
The pound pared an earlier loss to trade 0.2% lower at $1.2976. Gilts held gains with yields as much as six basis points lower across the curve, with traders still pricing 53 basis points of additional rate reductions by year-end.
The minutes said there was “no presumption that monetary policy was on a pre-set path over the next few meetings,” suggesting that a cut in May wasn’t certain. While the BOE has been on a once-a-quarter easing cycle since last August, confidence among market traders that the next move will come in May has shrunk in recent weeks. They expect two more reductions this year.
Still, the guidance suggested that a darkening global economic backdrop is yet to derail the UK central bank’s plan for a “gradual and careful” loosening.
“There’s a lot of economic uncertainty at the moment. We still think that interest rates are on a gradually declining path,” Bailey said in a statement alongside the minutes. “We’ll be looking very closely at how the global and domestic economies are evolving.”
The BOE noted rising global trade tensions, German plans to ramp up spending and more volatile financial markets. US President Donald Trump’s efforts to upend international trade and the world order are looming over central banks. On Wednesday, the Federal Reserve held rates steady for a second consecutive meeting, warning of the inflation impact of the White House’s tariffs crusade. Trump subsequently attacked the Fed’s decision.
In the UK, monetary policy officials are having to weigh up a weak domestic economy — which was already struggling to gain traction before geopolitical tensions mounted — against a resurgence in prices driven by higher energy bills.
While Britain has largely been spared much of the direct pain from US tariffs so far, it is expected to be hit by the broader economic fallout as global demand and confidence weaken. Bailey has warned of a potentially substantial impact on the UK from a trade war, even if the exact effect on inflation “can be ambiguous.”
Some of the BOE’s most dovish rate-setters had already sounded a more cautious tone in the run-up to Thursday’s meeting. Ramsden shifted back to the center-ground of the committee, highlighting concerns over firms’ plans to hike wages by almost 4% in 2025. Taylor has also become more wary, saying his certainty over the inflation outlook has “gone down substantially.”
The BOE confirmed forecasts predicting that inflation will hit almost double its 2% target, rising to 3.75% later this year. While officials believe the price spike will be caused by temporary factors, the minutes aired concerns about high inflation expectations among both consumers and businesses.
Figures on Thursday morning showed wage growth held at a nine-month high and employment rose in a sign of resilient demand. The minutes played down the strong pay data but said members would keep a close eye on wage settlements in the coming months, which will be an “important determinant” of future decisions.
When Katherine Stueland was 11 years old, she went to a reunion for her mother’s branch of the family tree and learned that multiple cousins had cystic fibrosis.
Stueland didn’t know what it meant for her or her immediate family. So she hit the books.
“There was one written by sportswriter Frank DeFord”—Alex: The Life of a Child—”about his daughter having cystic fibrosis,” she tells Fortune. “I devoured it and decided I was going to change the world. I ended up raising $1,500 for the Cystic Fibrosis Foundation.”
That moment didn’t exactly set Stueland on a path to become a physician or a lab rat. She went on to earn a college degree in, yes, science, but also English literature, and build her professional career working in communications for health-adjacent companies.
But her career arc slowly bent back toward that childhood revelation. Today, Stueland is the CEO of GeneDx, a publicly traded genetic testing company with $302 million in 2024 revenue and a $2.6 billion market cap, headquartered in Stamford, Conn.
“Today I spend most of my time working with rare disease patient advocates,” she says. “It’s kind of full circle in a sense. I did not intend for it to be that way at all.”
From pharma to biotech
Stueland spent the first part of her career working on pharmaceutical concerns. She worked on the first protease inhibitor for HIV/AIDS and the first cancer immunotherapy approved by the Federal Drug Administration. She worked on Lexapro and the effort to destigmatize depression and anxiety. She worked on Namenda, used to treat the severe dementia that comes with Alzheimer’s disease.
But it took a 2013 divorce to disrupt her pattern, pull her out of the Midwestern corporate pharma world, and thrust her into a West Coast biotech scene that eschewed offices, emphasized teams, and encouraged taking big risks.
“The corporate environment gave me the stability to survive,” she says. “As I got my confidence up, and talking to these companies and seeing how scrappy they were, that felt very much like home to me. Migration was about taking a risk on myself and feeling comfortable taking risks on other people, too.”
It was also a landmark year for the business of genetics. In 2013, the U.S. Supreme Court ruled in Association for Molecular Pathology v. Myriad Genetics that isolated human genes couldn’t be patented.
Stueland began working for Invitae, now owned by Labcorp, which had spun out of Genomic Health in part with the hope that the courts would rule as they did.
“Another taking-a-big-risk moment,” she says. “The company placed a big bet on that.”
The impact of accessibility
The nascent genetic testing industry took off like a rocket. More and different kinds of people had testing done. Costs plummeted—what was once $3,500 to sequence a single gene became less than that to do a genome that contains 20,000 genes.
And with wider testing, more patterns about genetic conditions were observed. For breast cancer, for example, the same share of patients inside and outside recommended screening guidelines were found to be at risk, widening the necessary aperture.
“We’re diagnosing more women with breast cancer, earlier, because we’re screening more,” she says, “but the morbidity rate is going down because we’re finding them earlier and able to intervene.”
Stueland’s career was unquestionably soaring along with the genetic testing boom. But it wasn’t until 2021 that she entertained the idea of taking a company’s top job.
‘I was totally surprised’
“In the middle of the pandemic I got a call about my interest in taking a CEO job,” she recalls. “I felt like I had a lot of clarity before that moment that I had zero interest. I was a really good right-hand person. But ‘yes’ came out of my mouth. I was totally surprised.”
That call came from a rival genetic testing firm: GeneDx. She was familiar with the organization and its technology because she had competed against it for years. But Stueland was an unorthodox candidate—a veteran of the category, yes, but one without an MBA, MD, or PhD.
“I wanted to create a culture where people could take risks on themselves and create amazing career journeys—where people could take risks they couldn’t at other companies,” she says. “This team is scrappy with people with many different backgrounds coming together with a common purpose.”
She also wanted to give a “smart, cerebral, bespoke, academic” company burning tens of millions of dollars a quarter the commercial muscle it needed to function in the public markets.
“It was a huge transformation, and I underestimated that,” she says. “It took an immense amount of partnership across the company. I knew that culture was going to be a huge part of what made or broke us, without a doubt.”
Accomplishing that meant embracing the dynamism of an entrepreneurial approach—faster, decisive, more growth-oriented—that first attracted Stueland from more the conventional environments she occupied earlier in her career.
“You know what song you need to play, what musicians you need to bring, what notes you need to play [for a given audience],” she says. “I consider the meetings in which I don’t speak as much as they do to be the best meetings I’m in.”
After years of recalibration—and a hard slide from its frothy 2021 market peak—GeneDx is once again on the upswing. The company’s shares are selling at 10X what they were a year ago. It’s on track to profitability this year. It stands to benefit from recent FDA guidance on the use of AI in medical devices. And it’s chipping away at a rare disease economic burden that its CEO estimates to be $1 trillion.
That’s all good news for GeneDx’s top executive. But on a personal level, Stueland is grateful that her career has come back to that family reunion all those years ago.
“There’s been this wonderful consistent thread of working with people who want to improve people’s lives, as pithy as that sounds,” she says. “A lot of people come to this industry from personal experience or the experience of a loved one.”
Economists for investment bank Goldman Sachs no longer see just a 20% risk of a recession, warning the probability is now 35%, given the tax-like impact on real disposable income and consumer spending from higher tariffs and their tendency to unnerve financial markets.
Goldman Sachs is warning that the odds of the U.S. economy shrinking over the coming months are rising dramatically.
In a research note to clients published on Sunday, Wall Street’s best-known investment bank says it expects there is a 35% chance that gross domestic product could contract for two straight quarters, up from just 20% previously.
It blamed the tax-like impact on real disposable income and consumer spending from higher tariffs as well as their tendency to unnerve markets, tighten financial conditions and create added uncertainty for businesses looking to invest.
“The increase in our recession probability reflects our lower growth baseline, the sharp deterioration in household and business confidence in the outlook over the last month, and statements from White House officials indicating greater willingness to tolerate near-term economic weakness in pursuit of their policies,” the bank said.
Economists with Goldman informed clients they were raising their tariff assumptions for the second time in less than a month, arguing investors were underestimating the risk higher import duties would have on the economy.
“We note that President Trump recently said he expected his planned tariffs to raise the unusually specific figure of $600 billion to $1 trillion over the next year, implying an average effective tariff rate of 18% to 30% on current import volumes.”
It estimates the combined impact of fiscal, immigration and tariff policy changes will subtract an estimated 1.2 percentage points from GDP growth over the next year.
Expect 3 rate cuts this year despite rising inflation
As a result, Goldman expects the Fed will cut interest rates in each of the three meetings scheduled for July, September and November.
Importantly, this comes despite an expectation that core personal consumption expenditure (PCE), the Fed’s preferred yardstick for inflation, will peak at about 3.5% this year due to the hike in tariffs, rather than the 3.0% under its prior forecast.
Instead, Goldman expects the Fed will justify easing monetary policy by pivoting to concerns over the labor market and stalling growth from a current focus centering on price stability.
The Trump administration couldn’t be reached for comment by press time, but on Friday, spokesman Kush Desai told Fortune tariffs were a strategic tool needed to rebuild heavy industry after decades of the wrong trade policy led to U.S. factories being moved offshore.
“America cannot just be an assembler of foreign-made parts—we must become a manufacturing powerhouse that dominates every step of the supply chain of industries that are critical for our national security and economic interests,” he said.
‘Recession by design’
Goldman Sachs isn’t the only one to take a more dour view towards growth.
Mark Zandi likewise hiked his oddsthat the U.S. economy will reverse. The Moody’s Analytics chief economist had previously expected a 15% risk, but now he sees this at a 40% probability. Zandi earlier this month had argued that if GDP were to shrink, it would be a “recession by design,” or put differently, a self-inflicted contraction in activity.
Trump has promised Americans a brighter economic outlook by lowering the price of energy, cutting taxes and tackling anti-growth obstacles like bureaucratic red tape.
Yet there have been suspicions that Trump may first be trying to manufacture an economic cooldown to bring 10-year yields on sovereign bonds lower in what some have come to call a “Trumpcession“.
With an unusually high $6.7 trillion in U.S. debt needing to be refinanced this year, there are considerable fears on the part of investors like Ray Dalio, founder of the macro hedge fund Bridgewater, that Uncle Sam will struggle to find enough demand at affordable rates.
Altogether, some $28 trillion of outstanding U.S. national debt is traded among investors, and higher rates endanger the sustainability of servicing the interest burden, now greater than the Pentagon’s budget.
Given these concerns, the fears over Treasury Secretary Scott Bessent have indicated he is more concerned about his borrowing costs paid on the benchmark U.S. long bond than he is with the health of the stock market.
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