📊 【September Federal Reserve Meeting Preview: Intensifying Internal Divisions, Possible First Three Dissenting Votes Since 1988 | Encryption Navigator Flying Fish】

The Federal Reserve will hold a monetary policy meeting from September 16 to 17. This meeting is highly anticipated, not only because the market generally expects an interest rate cut to be initiated, but also due to the potential significant divisions within its ranks. Analysis indicates that there may be three governors voting against the decision at this meeting, which would mark the first time since the early tenure of former Chairman Greenspan in 1988 that the Federal Reserve's policy resolution encounters such a level of opposition.
🔍 1. Four Key Figures and the Possible "Four-Sided Battle" The biggest highlight of this meeting is the dramatic changes in the composition of the voting committee and the potential "four-sided battle" situation it may lead to. The image below outlines the core viewpoints and representative figures of each camp:
II. Why is there such a huge internal divergence? This rare divergence is the result of a combination of multiple factors, including political pressure, differences in the interpretation of economic data, and the transition between new and old council members.
Deep political pressure: President Trump has repeatedly publicly pressured Federal Reserve Chairman Powell to "immediately cut interest rates significantly," even threatening to fire him and criticizing the Federal Reserve for its "lack of courage to act." The purpose may be to demonstrate to the market that the Federal Reserve's monetary policy is not purely a "technocratic process," and its decisions will be influenced by White House selections. The swift appointment of new board member Milan is also seen as a key step in Trump's efforts to strengthen his influence over the Federal Reserve.
Interpretation of Economic Data's Binary Opposition: On one hand, the U.S. unemployment rate rose to 4.3% in August (the highest in nearly four years), and the number of new non-farm jobs was far below expectations. This is seen by dovish officials as a clear signal that immediate and significant interest rate cuts are needed. On the other hand, inflation (especially core PCE) remains above the Federal Reserve's 2% target, and the tariff policies planned by the Trump administration may push inflation higher in the future, which serves as the main basis for hawkish officials advocating caution.
Dramatic turn of personnel changes: Before this meeting, the qualifications of two voting committee members were confirmed, which exacerbated the complexity of the situation.
Lisa Cook (: The U.S. Court of Appeals rejected Trump's request to dismiss her, allowing her to attend this meeting. She is proving her independence and may even unexpectedly vote in favor of an interest rate hike.
Stephen Miran ): The U.S. Senate quickly passed his nomination to the Federal Reserve Board by a narrow margin of 48 votes to 47, and he is expected to participate in the voting at this meeting, potentially advocating for a larger rate cut.
📉 3. Historical Comparison: Why are the three dissenting votes so important? The Federal Reserve's decision-making body usually tends to reach a consensus, and it is extremely rare for multiple members to cast dissenting votes.
At the meeting in July, Waller and Bowman voted against keeping interest rates unchanged and supported a rate cut, marking the first time since 1993 that two board members simultaneously opposed the interest rate decision.
If there are three opposing votes in this meeting, it will be an unprecedented situation since the Greenspan era in 1988. This strongly indicates a fracture in the internal consensus of the Federal Reserve and the potential erosion of political factors on the independence of the central bank.
⚠️ 4. What could it mean for the market? Such a high level of internal divergence will bring significant uncertainty to the market.
Policy signals are extremely chaotic: Fed Chairman Powell's wording at the press conference will become unusually difficult. He needs to balance various factions' views, and the policy statement and "dot plot" may become vague, making it hard for the market to judge the future rate path.
Market volatility intensifies: Any unexpected voting results (such as Cook voting for an interest rate hike or Milan and others insisting on a 50 basis point rate cut) could trigger severe market fluctuations. Traders need to be prepared for all possibilities, including a reversal of the trend of "buy the expectation, sell the news."
Long-term concerns about the independence of the central bank: If the market believes that the Federal Reserve's decisions are increasingly influenced by political pressures rather than purely driven by economic data, it may undermine the credibility of the dollar and the Federal Reserve, raising long-term inflation expectations and bond yields.
💡 5. How should investors respond? In the face of this unprecedented complex situation, maintaining caution and flexibility is key.
Pay attention to Powell's wording: Rather than the interest rate cuts themselves, the press conference and the economic projections summary (dot plot) better reflect the true intentions and future plans of the Federal Reserve. Focus on his tone when assessing inflation and employment risks.
Manage your positions well: Market volatility often significantly increases before and after major events. It is recommended that investors manage their positions and control risks in advance according to their own risk tolerance, to avoid excessive leverage.
Diversify investments to cope with uncertainty: Ensure a diversified portfolio in situations where outcomes are hard to predict, avoiding bets on a single direction.
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(The above content is for reference only and does not constitute any investment advice.)