Jerome Powell has a chance to make his life significantly easier this week. If he was minded, he could recommend at the meeting of the Federal Open Market Committee (FOMC) that the base rate should be cut—thus removing some of the pressure the White House is exerting on the Fed.
Markets do not expect Powell to capitulate and will instead hold off until later this year before beginning a path down towards normalization—when any inflationary data from Trump’s tariff regime will have trickled through the economy.
But analysts believe dissent will increase during the FOMC meeting taking place today, as some members of the group have publicly suggested they would be open to cutting sooner rather than later.
“There may be one or two dissents from the decision,” wrote Macquarie economists David Doyle and Chinara Azizova in a note sent to Fortune yesterday. “Earlier this month, in an unusual move, Governor Waller publicly outlined his view there should be a cut this meeting, while outlining the case for near-term action.”
Maintaining the view that the Fed will hold off cutting until December with a 0.25% reduction, and a further easing of the same amount in 2026, the economists added markets will instead focus on the contents of Powell’s press conference, adding: “Key topics that may be addressed … include Fed independence, ongoing uncertainty, tariffs and inflation, and the recent signals of stabilization in the labor market.”
