Historic Federal Reserve Dissent Expected at July Meeting

For the first time in over 30 years, the Fed could see not one, but two board members dissenting from the majority vote.

Fed Governors Christopher Waller and Michelle Bowman—both Trump appointees—are reportedly planning to vote for a 25-basis-point rate cut, in contrast to Chair Jerome Powell’s call for maintaining the current rate. This move would break the Fed's traditional consensus-style decision-making.

Why It Matters:

No Rate Cut Expected: The Fed is widely expected to hold rates steady around 4.3%, marking the fifth straight hold, as inflation remains sticky at around 3.5% in June .

Split in Policy Views: Waller and Bowman cite weakening labor conditions and softening consumer demand as justification for an early cut, clashing with the more cautious majority that aims to keep inflation anchored .

Political Undertones: Trump has vocally pressured Powell for immediate cuts, and this dissent aligns with Washington's broader political push—even as central bank independence faces scrutiny.

Market Takeaways:

Scenario Likely Impact

**Dissents (Waller & Bowman)** Historic split - symbolic, won't change policy outcome

No Fed rate change Continuation of cautious stance, markets aligned for later cuts

Possible rate cuts later in 2025 Markets expect 25 bp cut in September, maybe two by December

Analysts expect the markets to largely ignore dissents as political symbolism rather than a signal for imminent easing . Still, the meeting is being watched as a test of Powell’s authority and institutional unity.

What to Watch:

Powell’s press conference tone on market outlook and inflation

Any language hinting at cuts later in 2025 (September or December)

Reaction in US Treasury yields, equities, and risk assets (e.g. crypto)