Lone dissent shows Powell kept Fed united amid Trump pressure
Sign up now: Get ST's newsletters delivered to your inbox
Fed chair Jerome Powell managed against the odds to forge a near-unanimous consensus at this week’s policy meeting.
PHOTO: REUTERS
Follow topic:
WASHINGTON - Arguably the biggest surprise from the US Federal Reserve’s decision on Sept 17: Only a single dissenting vote.
Fed chair Jerome Powell managed against the odds to forge a near-unanimous consensus at this week’s policy meeting, with new governor Stephen Miran the only one to vote against the quarter percentage point interest rate cut.
Mr Miran, a close ally of US President Donald Trump who was just sworn into a temporary Fed position on Sept 16, dissented in favour of a larger reduction of half a percentage point – something the President has been demanding for months.
But Fed governors Christopher Waller and Michelle Bowman, both of whom lodged dovish dissents in July, refrained from doing so this time around.
“It’s really clear that Powell corralled the cats,” KPMG chief economist Diane Swonk said on Bloomberg TV after the decision.
The White House is considering Mr Waller and Ms Bowman among potential candidates to replace Mr Powell as chair when his term ends in May.
Mr Trump appointed both of them as Fed governors during his first spell in office.
Mr Miran, meanwhile, is taking unpaid leave from his position as chairman of the White House Council of Economic Advisers to fill a temporary seat at the Fed which expires in January 2026.
That appointment has amplified concerns that the central bank’s monetary policy decisions are becoming politicised.
Mr Trump has been relentless in his demands for outsize rate reductions. The Fed has mostly ignored them, keeping its benchmark unchanged over the first eight months of 2025 to guard against the risk of inflation from the President’s tariffs.
In his press conference on Sept 17 following the rate cut announcement, Mr Powell said the committee’s structure prevents any one policymaker from having outsize influence.
“There’s 19 participants, of whom 12 vote on a rotating basis,” Mr Powell said. “The only way for any voter to really move things around is to be incredibly persuasive.” BLOOMBERG
