Surprise! Only one person opposed the Fed's "25 basis point rate cut," while Miran—just appointed by Trump—voted for a "50 basis point rate cut."
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The latest Federal Reserve interest rate decision passed with an almost unanimous vote for a 25 basis point rate cut, with the only dissenting vote coming from an ally recently nominated by President Trump.
On Wednesday local time, the Fed's first rate cut of the year was implemented as expected, lowering the target range of the federal funds rate from 4.25%-4.5% to 4.00%-4.25%.
The biggest surprise of this meeting was that only one official voted against the decision. Stephen Miran, who was sworn in as a new governor just on Tuesday, opposed the decision, advocating for a larger 50 basis point rate cut, which echoes Trump's long-standing demands.
Meanwhile, Federal Reserve governors Christopher Waller and Michelle Bowman, who voted against the decision to keep rates unchanged in July due to their support for rate cuts, this time sided with the majority.
KPMG chief economist Diane Swonk said in an interview:
"It's clear that Powell has managed to rein in these maverick members."
Analysts generally believe that this voting result has temporarily eased concerns about internal divisions within the Fed, sending a more unified policy signal to the market.
Trump Ally Miran Appears, Casts Dissenting Vote on Second Day in Office
Stephen Miran’s addition has injected new uncertainty into the Fed’s policy discussions.
As a close ally of the president, Miran is currently on unpaid leave from his position as chair of the White House Council of Economic Advisers, filling a temporary Fed seat that will expire in January next year. On the day after being sworn in, he cast the only dissenting vote, advocating for a more aggressive 50 basis point rate cut.
According to previous media reports, the Fed’s economic projections also indicated that one official (most likely Miran) had a rate path forecast "significantly lower" than the other 18 peers, and may continue to support "super-sized" rate cuts at the next two meetings.
Miran’s appointment and his direct connection with the White House have heightened concerns about the potential erosion of the Fed’s independence.
Jason Furman, who served as Chair of the Council of Economic Advisers under President Obama, commented:
"Between an independent Federal Reserve System and a core position in the White House, you should not play a dual role of any kind."
Powell Consolidates Consensus, “Dovish” Dissenters Temporarily Fall in Line
Before this meeting, it was not a given that Powell could unite all the committee members.
Waller and Bowman had opposed the decision to keep rates unchanged in July, arguing that rate cuts should have begun then. Both are seen by the White House as potential replacements for Powell as Chair, and their stances have attracted attention.
However, at this meeting, both refrained from dissenting and instead supported the 25 basis point rate cut.
This indicates that in the face of the complex environment of slowing economic growth and rising prices, Powell has successfully achieved a subtle balance within the committee. As Powell said at the post-meeting press conference, “Now there are no risk-free paths left.”
Additionally, the Fed’s economic projections indicate that policymakers expect two more standard rate cuts this year, partly fulfilling the White House’s expectations for lower borrowing costs.
Powell Defends Independence: “We Don’t Operate from a Political Perspective”
Amid intensifying political controversy, Powell clearly defended the Fed's independence at the press conference.
He emphasized that the committee's structure effectively prevents any single decision-maker from wielding excessive influence. “There are 19 participants on the committee, with 12 rotating voting members,” Powell said. “If any voter really wants to make an impact, the only way is to be extremely persuasive.”
When asked about Miran's addition, Powell welcomed the new member and stressed that the committee would continue to unite in pursuit of its twin mandate of full employment and price stability.
Powell drew a clear distinction between Washington’s political logic and the Fed’s decision-making framework. “Elsewhere in Washington, everything is viewed through ‘does this benefit this party or that politician,’” he said, “It’s hard for people to believe, but at the Fed we simply don’t think of things that way... I don’t believe we’ll go down that road.”
He reiterated that making decisions based on economic outlook rather than political factors is a principle "deeply rooted in our culture."
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