Federal Reserve Faces Internal Resistance Amid Trump's Rate Cut Expectations

According to BlockBeats, U.S. President Donald Trump expressed this week that he anticipates a significant drop in interest rates following the appointment of a new Federal Reserve Chair in May next year. However, there is growing opposition within the Federal Reserve against a rate cut in December, suggesting that Trump's expectations may not be realized. Federal Reserve Chair Jerome Powell faces substantial internal resistance, the most severe in nearly eight years, whether he decides to maintain the current rates or proceed with a rate cut in December. This division could persist into the next year, indicating that a change in leadership does not guarantee further rate cuts. Some are concerned that if Trump does not achieve his desired outcome, he might take more aggressive measures to undermine the central bank's independence to secure rate cuts. For over 30 years, Federal Reserve Chairs have sought to achieve the broadest possible consensus on interest rate decisions, avoiding decisions passed by a narrow majority. However, the December meeting is likely to see three or more dissenting votes. Krishna Guha, an economist at Evercore ISI, noted that the decision-making process is breaking down, and next year could witness a deeply divided committee. The December meeting feels like a preview of 2026, suggesting an unprecedented scenario where monetary policy outcomes might be decided by a rare narrow majority, rather than the traditional broad consensus. Trump's appointed new chair may not always be able to control the situation.