The July Fed decision came with two dissents, the first time in over 30 years that happened under tightening conditions. One board member wanted a cut. Another wanted a pause. Powell stuck with holding rates steady, but the split wasn’t subtle. The official line is “data dependent.” Market reaction says something else. Fed futures now price in a 65% chance of a cut by September.
“We’re in uncharted territory. Internal division this visible means the center isn’t holding.”
https://www.reuters.com/markets/fed-two-dissents-2025-signal-fracture-2025-07-31/
An ex-Fed advisor added, “This level of dissent during a policy plateau signals deep unease. They’re not unified on where this is going.”
https://www.wsj.com/articles/federal-reserve-dissent-powell-rates-2025
Powell’s grip looks weaker with every split vote. If the board is fractured now, ahead of election season and rising credit strain, cuts are coming whether he wants them or not. The language may stay cautious. The clock won’t.
