Federal Reserve's fractured vote signals trouble ahead for future rate cuts

around the Fed, there’s going to be enormous pushback to rate cuts,” said Diane Swonk, chief economist at KPMG.

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The rate-setting Federal Open Market Committee is led by the chair but includes 11 other members: six other members of the board of governors, who are appointed by presidents from both parties, and the New York Fed president and four ofl other Fed bank presidents, who take turns voting. Those bank presidents aren't political appointees.

‘The disagreement on display reflects how the Fed was designed, said Richard Clarida , a former Fed vice chair who served alongside Powell and is now at Pimco. “The FOMC was intentionally set up to have a mix of voting on policy by the reserve bank presidents and the board,” he said. “That is very much a feature, not a bug.”

The Fed’s consensus-driven culture aims to build broad enough support to minimize dissents, but Wednesday's opposition to a cut wasn't necessarily “antagonistic toward the leadership,” said David Mericle , chief U.S. economist at Goldman Sachs. “It could actually be somewhat helpful, because they're trying to get across ‘the bar is higher’ without saying, “We're not going to do something that we might very well wind up wanting to do.”

Trump’s own advisers have acknowledged the constraints in the past few days. Treasury Secretary Scott Bessent said recently that “the chair of the Federal Reserve has the ability to move and start the discussion, but at the end of the day, he or she has one vote.”