The Fed's biggest revolt in 32 years could begin today

Good morning, investors. After a few days off for my wedding in California, I’m glad to be back in your inbox — now as a married man!

Naturally, I had to come back in time to report on the key Federal Reserve meeting today. No one expects policymakers to change interest rates this afternoon, but tensions continue to rise inside the Eccles Building.

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Fracturing Fed

Jerome Powell’s authority at the Federal Reserve keeps chipping at the edges.

For the first time since 1993, more than one Fed governor could vote against the chairman in an official policy decision.

That won’t change the outcome — prediction markets see 97% odds of no adjustment to interest rates — but a fractured consensus undermines the central bank’s tradition of unity and its leader’s grip on policy. 

Two of the seven sitting governors, Michelle Bowman and Christopher Waller, have made the case for a rate cut in recent weeks.

Assuming they both follow through with dissenting votes Wednesday afternoon, it would be the first time that at least two governors have done so in 259 official meetings.

“If they don't dissent, then the stock and bond markets could rally significantly on expectations that the FOMC participants are leaning toward cutting [in September], thus placating the two potential dissenters,” said veteran strategist Ed Yardeni of Yardeni Research.

Both Bowman and Waller are Trump appointees, and they have taken some political flak for aligning themselves with the president’s calls for immediate rate cuts. 

That said, Bowman and Waller have argued that the labor market is not as strong as consensus economists believe.

Their case for lower rates is rooted in signs of cooling wage growth and slowing job creation — an assessment that quietly contradicts the White House’s narrative of economic strength. 

In other words, while their stance aligns with Trump’s preferred policy outcome, it does so for reasons that challenge his messaging. 

Regardless of whether Powell & Co. move forward with rate cuts this summer, his ability to project a sense of cohesion is increasingly in doubt. 

A visible split among the Fed’s ranks risks eroding investors’ confidence in the central bank, adding fuel to Trump’s push to name Powell’s successor well before his term ends in May 2026.

A recent CNBC survey found that the leading contenders for the top Fed job include Treasury Secretary Scott Bessent, former Fed official Kevin Warsh, and National Economic Council director Kevin Hassett. 

As Opening Bell Daily has reported all year, Trump has engaged in a colorful war of words with Powell: 

• “Mr. Too Late”
• “Jerome Powell is a real dummy”
• “He should cut rates by 3%”
• “Powell is a knucklehead”

With the name-calling from the Oval Office and successors circling, even symbolic dissent within the Fed could move markets as much as a tangible policy change. 

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