Fed Faces Rare Split as Trump Appointed Governors Challenge Powell on Rate Cut

According to a recent Wall Street Journal report, the US Federal Reserve is poised for a split vote on interest rates at its upcoming policy meeting, with governors potentially divided. Two Fed governors appointed by President Donald Trump may dissent from Chair Jerome Powell’s expected decision to hold interest rates steady.

Will the Fed Split on Interest Rate Vote Ahead of FOMC?

In a recent report by the Wall Street Journal, journalist Nick Timiraos highlighted the possibility of a rare split vote on interest rates among Federal Reserve governors at today’s policy meeting. As per the report, the Trump-appointed governors—Christopher Waller and Michelle Bowman—are expected to dissent from the Fed Chair’s possible decision on interest rates.

Notably, Fed Chair Jerome Powell is likely to keep the interest rate unchanged at 4.25-4.5%, a level that has remained steady since January. Journalist Timiraos claims that the Governors Waller and Bowman may break ranks, advocating for an immediate interest rate cut. This would mark a historic moment, as it’s been over 30 years since multiple Fed governors dissented from the chair in a single meeting.

Interestingly, these governors have already raised concerns over the Fed’s monetary policy. This has further supported the journalist’s prediction of a split vote at today’s FOMC meeting.

Fed Chair Contenders Call for Rate Cut

Significantly, both Christopher Waller and Michelle Bowman are strong candidates to succeed Chair Powell, whose term ends next May. As CoinGape reported, other Fed Chair contenders include Kevin Warsh, Kevin Hassett, and Scott Bessent.

Bowman, a top banking regulator, broke her silence on dissents last September by voting against a larger rate cut, opting for a more modest reduction instead. In June, Bowman stated,

Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market. In the meantime, I will continue to carefully monitor economic conditions as the Administration’s policies, the economy, and financial markets continue to evolve.

At the same time, Governor Waller, a strong advocate for monetary policy easing, has positioned potential dissent as a matter of principle rather than politics. In mid-July, Waller stated,

I believe we should cut the policy rate at our meeting in two weeks…With inflation near target and the upside risks to inflation limited, we should not wait until the labor market deteriorates before we cut the policy rate.

The crypto community is watching Powell’s speech today to know the Fed’s decision on interest rates. It is noteworthy that President Trump’s recent visit to the Fed headquarters has intensified pressure on the central bank to reconsider its monetary policy. Thus, it is more likely that his appointees will advocate for an immediate rate cut.

Nynu V Jamal

Nynu V Jamal is a Senior Journalist at CoinGape. She boasts more than 3 years of experience in content writing, with expertise in crypto and blockchain. She has contributed to platforms like CoinEdition and CryptoTale, demonstrating her proficiency in navigating the dynamic crypto landscape.

Beyond her journalistic pursuits, Nynu is a literary enthusiast, having served as an Assistant Professor of English Language and Literature. She is a Master’s degree holder in English Literature and a UGC NET qualifier. Her academic background has enabled her to publish research papers on literature, while also nurturing her creative side as a published poet.

Her creative side extends to music, crafts, and art, which she actively explores. Her unique blend of analytical and creative skills allows her to craft engaging stories that captivate audiences. Stay updated with Nynu on LinkedIn