Federal Reserve May Face Internal Division in Next Interest Rate Decision
According to BlockBeats, specialists from Capital Economics highlighted that the Federal Reserve — typically guided by consensus decisions — is showing signs of increasing internal divergence, which could result in a deadlock at the monetary policy meeting scheduled for next month.
In the report published last Friday, the institution's economists analyzed the possible correlation of votes within the committee. Four regional Fed presidents — Collins, Goolsbee, Mester, and Schmid — expressed doubt or direct resistance to the possibility of a rate cut. Among the governors, Barr and Jefferson also adopted a more cautious stance.
On the other hand, three governors nominated by U.S. President Donald Trump — Bowman, Milan, and Waller — have advocated for a reduction in rates. Recent comments from Williams suggest that he may align with this more dovish group.
Capital Economics noted: “Based on this projection, only four votes would be in favor of the cut, while six would be opposed. However, considering that Williams and Fed Chair Jerome Powell usually share the same line of thought (and that Governor Lisa Cook often follows Powell's position), there is a possibility of a tie of six votes on each side.”
Economist Robert Eisenbeis, former research director at the Federal Reserve Bank of Atlanta, stated in an interview with Fortune earlier this year that, in the event of a tie in the voting, the current Fed Funds rate would remain unchanged.
