Two Fed Governors Expected to Dissent on Interest Rates

The Federal Reserve's upcoming policy meeting is expected to mark a rare event, with more than one governor potentially dissenting from Chair Jerome Powell's anticipated decision to keep interest rates steady. Governors Christopher Waller and Michelle Bowman, both appointees of President Trump, are likely to vote against Powell, advocating for immediate rate cuts, reflecting pressure from President Trump who has publicly demanded lower rates. This potential split vote would be the first of its kind since 1993, highlighting internal Fed tensions amid ongoing debates about monetary policy in the face of elevated inflation and a resilient labor market. While the Fed Chair and most colleagues favor a wait-and-see approach, economic data such as a projected 1.8% GDP growth and steady inflation at 2.7% keep the outlook uncertain. Powell’s press conference following the announcement will be closely watched for insights on the Fed’s independence and future rate decisions. The situation underscores a monetary policy environment influenced by a succession campaign, with both Waller and Bowman considered leading candidates to succeed Powell when his term ends next May.