TechFlow, November 22 — According to Jinshi Data, "Fed Whisperer" Nick Timiraos wrote this week that Trump stated he expects interest rates to drop significantly after the appointment of a new Fed chair in May next year. However, growing internal opposition at the Fed against a December rate cut suggests his hopes may be difficult to realize. Whether Powell chooses to hold steady or cut rates in December, he faces the strongest internal resistance of his nearly eight-year tenure. This division could persist into next year, meaning even a leadership change would not guarantee more rate cuts. Some worry that if Trump fails to get his way, he might resort to more aggressive measures to undermine central bank independence in exchange for lower rates. For over 30 years, Fed chairs have sought as broad a consensus as possible on rate decisions, with no decision ever passed by a narrow majority. But the December meeting could see three or more dissenting votes. Evercore ISI economist Krishna Guha said, "We are witnessing a breakdown in the decision-making process, and we may see a deeply divided committee next year." The December meeting feels like a rehearsal for 2026, pointing to an unprecedented scenario: monetary policy outcomes could be determined by rare, narrow majorities—breaking from the long-standing tradition of seeking wide consensus—and even a new chair appointed by Trump may not always be in control.
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