Analysis: Powell is not the biggest obstacle to rate cuts; the Federal Reserve's internal consensus mechanism is on the verge of collapse

BlockBeats News, November 22, "Federal Reserve mouthpiece" Nick Timiraos wrote that Trump stated this week he expects interest rates to drop significantly after appointing a new Federal Reserve Chair in May next year. However, internal opposition within the Fed to a rate cut in December is growing, which means his wish may be difficult to realize.

Whether Powell chooses to hold rates steady or cut them in December, he faces the most severe internal resistance of his nearly eight-year tenure. This division may continue into next year, meaning that even replacing the Chair does not guarantee more rate cuts. Some are concerned that if Trump does not get his way, he may take more aggressive measures to weaken the central bank's independence in exchange for rate cuts.

For more than 30 years, Federal Reserve Chairs have sought to reach the broadest possible consensus on interest rate decisions, and there has never been a decision passed by a narrow majority. However, the December meeting is very likely to see three or more dissenting votes.

Evercore ISI economist Krishna Guha said, we are witnessing a breakdown in the decision-making process, and next year we may see a seriously divided committee. (December) feels like a preview of 2026. This suggests an unprecedented prospect: monetary policy outcomes may be decided by a rare narrow majority (rather than the broad consensus pursued for many years), and a new Chair appointed by Trump may not be able to control the situation every time. (Golden Ten Data)