In the final phase of Jerome Powell's leadership at the Federal Reserve, a rare internal division is emerging. At tonight's interest rate meeting, as many as three governors nominated by Trump are expected to cast dissenting votes in favor of a rate cut—this would be the first time since 1988 that three governors have collectively opposed the majority position at the same policy meeting. This pattern suggests that incoming Chairwoman Lisa Cook will take over a committee with deepening rifts.According to Nick Timiraos of the &#34;New Federal Reserve News Agency,&#34; writing in the Wall Street Journal on the 17th, the uncertainty triggered by the Iran war is expected to strengthen the majority's position to maintain interest rates, but it also makes potential dissenting votes more noteworthy. Governor Stephen Miran has supported rate cuts at every meeting since joining the Federal Reserve last September; Christopher Waller cast a dissenting vote at the January meeting; and Michelle Bowman stated in a television interview two weeks ago that the economy &#34;may need support from policy rates.&#34; All three are Trump nominees, and Trump publicly called for an immediate rate cut last week.The significance of this situation lies not only in the vote count itself—more importantly, all three governors come from the same president who has openly pressured the central bank, and their voting tendencies are highly aligned with that president's demands. Former Boston Fed President Eric Rosengren stated, if the market believes these governors are acting in a politicized manner, &#34;this would be an extremely dangerous situation.&#34;Vincent Reinhart, chief economist at BNY Investments and former senior advisor at the Federal Reserve, warned that as Trump may have more nomination opportunities, investors' expectations of the Federal Reserve &#34;will increasingly depend on political economics rather than macroeconomics.&#34; According to CME FedWatch data, the market expects a 99% probability that the Federal Reserve will keep interest rates unchanged in the range of 3.5%-3.75%.<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/491b26d3-5492-4955-8210-3b5419b058b9.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/491b26d3-5492-4955-8210-3b5419b058b9.png"/><h2>Structural Components of Dissent Among Governors</h2>Federal Reserve interest rate policy is decided by a committee of 12 members, divided into two categories: seven governors nominated by the president, who are based at the headquarters in Washington; and five seats rotated among the 12 regional Fed presidents, who are selected by boards composed of local business and nonprofit leaders and are not politically appointed.Timiraos noted that dissenting votes from regional Fed presidents occur from time to time; however, dissenting votes from governors have historically been extremely rare, thus having a more profound impact. This practice is being broken recently. Bowman will become the first governor in 19 years to oppose a policy decision in 2024 when she votes in favor of a smaller rate cut. Last summer, she teamed up with Waller to dissent in support of looser policies, marking the first time since 1993 that two governors jointly opposed the chair's position. In the December interest rate meeting last year, there were three dissenting votes, but in opposing directions—two regional Fed presidents opposed a rate cut, while Miran advocated for a larger rate cutIn the January meeting, Miran and Waller teamed up again.<h2>Positions of the Three Dissenting Candidates</h2>Timiraos stated that the positions of the three board members each have their own emphasis. Miran's stance is the most pronounced, having never ceased to dissent since joining; previously, he served as a senior economic advisor in the Trump administration. Waller, after dissenting in the January meeting, is seen as a strong candidate to cast another dissenting vote this week—he believes the unexpected decline in February's non-farm payroll data reinforces the judgment that the labor market is approaching a &#34;critical point.&#34; Bowman cited the same employment report, stating that the economy &#34;may need interest rate support&#34;; she outlined a path for three rate cuts in 2026 in her December rate forecast, more than most of her colleagues. Trump appointed Bowman as the Vice Chair for Bank Supervision at the Federal Reserve last year.However, some former officials question whether the current economic fundamentals support rate cuts. The Iran war has driven oil prices sharply higher, adding another source of inflation against the backdrop of tariff pressures that may not have fully transmitted yet; the Fed's preferred inflation measure had already exceeded 3% before the outbreak of the war. Former St. Louis Fed President and current Dean of Purdue University's Business School, Jim Bullard, stated:&#34;Voting dissent when core inflation is above 3% and persistently moving in the wrong direction sends the signal that you are indifferent to inflation. I think this is a difficult position to justify.&#34;<h2>The Boundary Between Healthy Dissent and Political Fracture</h2>Timiraos noted that several former officials have expressed concerns about the evolution of this pattern. They distinguish between two different types of dissent: Board members occasionally breaking consensus based on their own judgment, and voting in unison with all of Trump's nominees in every meeting towards the president's expectations.Timiraos cited Rosengren's viewpoint, pointing out that in countries where central banks have been eroded by political pressure, the public ultimately loses confidence in officials' ability to take necessary measures to curb inflation, and this loss of confidence itself makes inflation harder to control. A deeper risk is that seemingly healthy dissent evolves into a partisan divide similar to that of the Supreme Court—individuals may believe they are following independent analysis, but what the public sees is merely a partisan stance. This would represent a profound shift for the Federal Reserve, as the policy trade-off between price stability and employment has historically never split along partisan lines.In contrast, institutions like the Bank of England have long been accustomed to divisions in voting on policy decisions. The Federal Reserve has previously avoided this situation not because officials always agreed, but because a broad consensus allowed the market to focus on economic prospects rather than speculating on which faction would dominate the next decision. Waller himself admitted last year to the risks of split voting:<blockquote>&#34;If there really is a 7 to 5 vote, the next time one person's position changes, the entire interest rate path changes.&#34;</blockquote><h2>All Parties Set the Stage During the Transition Period</h2>Timiraos pointed out that this week's potential dissenting votes are unlikely to be interpreted as a direct challenge to Powell's leadership—Powell's term will end in May, and Waller is awaiting Senate confirmation. A more likely scenario is that both sides of the committee are using Powell's transition period to delineate their positions and set the tone for the upcoming policy handover.** Hawkish officials may use this week's quarterly forecasts to clearly express their stance against interest rate cuts while inflation remains above the 2% target. Rosengren stated, &#34;There will be more attention on how this affects the new chair's view of the committee dynamics.&#34;For regional Federal Reserve presidents, this week's situation may also serve as a reminder that the political ecology of monetary policy has fundamentally changed. Reinhart noted that if Trump gains more nomination power in the future, this political force will continue to grow. His conclusion is concise and powerful: &#34;This should remind people that future predictions about the Federal Reserve will be more about political economy than macroeconomics.&#34;

Nick Timiraos believes that the three governors nominated by Trump (Miran, Waller, Bowman) are likely to join forces to cast dissenting votes in support of interest rate cuts, breaking a record since 1988. Despite the escalating inflation risks from the Iran war, these three governors deliberately diverge from Powell's majority stance, aligning with Trump's pressure. Incoming Chair Walsh may take over a deeply divided committee. Data shows that the probability of the Federal Reserve keeping interest rates unchanged is as high as 99%

- Under Jerome Powell's leadership, a rare split is emerging within the Federal Reserve, with up to three Trump-appointed governors expected to dissent in favor of a rate cut.  
- This situation is significant not just for the votes, but because these governors’ positions align closely with Trump’s demands for immediate rate reductions, raising concerns about political influence over monetary policy.  
- As the Fed navigates this transition, investors may increasingly view Fed actions through a political lens, potentially undermining the independence traditionally associated with monetary policy.

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New Federal Reserve News Agency: Powell's "second to last" interest rate meeting, Fed's divisions intensify