The upcoming meeting of the Federal Reserve (also known as the Federal Reserve), scheduled for December 9-10, will involve voting on interest rate policies. Currently, there is still significant internal discord regarding the question of whether to cut interest rates. Officials struggle to reconcile the signs of a soft labor market with the rising inflation pressures.
Since the summer, there have been serious disagreements among the decision-makers at the Federal Reserve. Those against rate cuts argue that inflation remains stagnant, the 2% inflation target has not been met, full employment has not been achieved, and the risks associated with cutting rates are too high. On the other hand, supporters believe that cutting rates would help increase employment.
In September, the Federal Reserve cut rates by 0.25 percentage points, marking the first rate cut since last year, and took similar action in October, bringing the benchmark interest rate down to 3.75% to 4%.
The Federal Open Market Committee (FOMC), the rate-setting body of the Federal Reserve, consists of 12 voting members — 7 are members of the Board of Governors of the Federal Reserve, and 5 are from the 12 Federal Reserve Banks, with the President of the New York Federal Reserve Bank holding a permanent voting seat, while the other 4 seats rotate among the Presidents of the other 11 Federal Reserve Banks.
The 7 members of the Board of Governors of the Federal Reserve are nominated by the U.S. President and appointed after Senate approval. They are responsible for formulating monetary policy and regulating the banking system.
Among the 12 voting members of the FOMC, 5 have expressed opposition or doubt towards further rate cuts, while three members of the Board of Governors have indicated a desire for rate cuts.
Christopher Waller, a member of the Federal Reserve Board, stated in November that “you may see the least amount of ‘groupthink’ in recent years.”
Prior speculation suggested that if the Federal Reserve were to approve another 25-basis-point rate cut as the financial markets expected, the December meeting might see three or more dissenting votes. Since 2019, there has not been a meeting of the FOMC with three or more dissenting votes, a situation that has occurred nine times since 1990.
Federal Reserve Chair Jerome Powell has not provided a clear expectation for the December meeting.
John Williams, President of the New York Federal Reserve Bank and Vice Chairman of the FOMC, expressed leaning towards rate cuts at the end of last month, mentioning that there is still room to reduce borrowing costs in the short term.
Analysts believe that given the policy statements of the FOMC and Powell’s indication of a potential halt…
According to a database from the St. Louis Federal Reserve Bank, instances of opposing views within the Federal Reserve are quite common, with around 20% of meetings chaired by Powell since 2018 experiencing at least one dissenting vote. Under Janet Yellen’s leadership, this proportion was close to half, while under Ben Bernanke’s leadership, it exceeded 60%.
However, most decisions involving dissent usually have only one dissenter, usually the locally rotating Reserve Bank President among the FOMC voting members, and less frequently a Governor appointed by the President. This pattern has changed during the Trump administration, with several presidentially appointed officials advocating for rate cuts, including Waller, being considered a potential successor to Powell next year.
Waller acknowledged the risks of continued divided voting results, stating that “if the vote is indeed seven to five, as long as one person switches sides, the whole situation will change. A situation where the outcome is decided by just one vote is very dangerous and will shake people’s confidence.”
The article referred by Reuters also highlighted the dynamics of consensus within the European Central Bank, where there is mostly one or two dissenting voices among the 26 members of the Governing Council. On the other hand, dissent in rate decisions is more common at the Bank of England, with the last unanimous vote being in September 2021. Since early 2024, the committee had four instances of 5-4 split votes.
The outlook for policy decisions in 2026 may depend on “political economics, namely when the White House can gain a majority on the Federal Reserve Board,” as expressed by Vincent Reinhart, formerly in charge of the Federal Reserve’s Monetary Affairs Division at BNY Investments.
On November 30, President Trump, returning from Florida to Washington on Air Force One, told reporters that he had chosen a nominee to succeed Federal Reserve Chair Powell and would announce it soon, refusing to disclose the nominee. Predictions in the market suggest that Kevin Hassett, Director of the National Economic Council, is the most likely candidate for the next Federal Reserve Chair, with a probability of 72%.
Hassett expressed, “When the market clearly senses that the President is about to make a decision, the market reacts very positively—rates drop, and we see one of the most successful debt auctions in history.”
“I believe the American people can expect President Trump to choose someone who can help them, such as making it easier for them to get cheaper car loans and lower mortgage rates.”
亚历山德罗‧维拉（Alessandro Villa）等人的最近研究也发现了这种动态变化
The predictions market broadly believes that…