Federal Reserve Chair Jerome Powell downplayed Wednesday the decision by two members of the central bank’s board to dissent on an interest rate decision for the first time in more than three decades.
Fed Vice Chair of Supervision Michelle Bowman and Fed Governor Christopher Waller’s double dissent Wednesday was the first break from majority opinion by two Fed governors since 1993.
Bowman and Waller are members of the Fed board of governors, which makes them ex officio members of the Federal Open Market Committee (FOMC), the larger panel of Fed officials in charge of setting interest rates.
“This was quite a good meeting all around the table,” Powell said during a press conference on Wednesday. “People thought carefully about this and put their positions out there.”
Waller and Bowman voted to reduce the interbank overnight lending rate by a quarter-percent following months of haranguing from President Trump, who has called for rates to be a full three points lower than where they currently are at a range of 4.25 to 4.5 percent.
While the rest of the committee in attendance voted to hold the rate, the group of monetary policymakers usually operates by consensus, fueling suspicions that Trump’s attacks are starting to weigh on the Fed, a traditionally and legally independent agenc
Some “will be keen to accuse Bowman and Waller of being partisans, easily swayed by Trump’s browbeating,” former Fed analyst Skanda Amarnath wrote on social media. “They’ve always been nonpartisan in their analysis and deserve to be taken seriously.”
Trump has been telling the Fed to cut rates since early this year and has even resorted to name-calling. He nicknamed Powell “Too Late” in reference to the Fed’s post-pandemic interest rate hikes, which Powell has acknowledged were tardy.
The pressure reached a high point last week during a rare joint appearance by the two men at a construction site where the Fed is doing a renovation that has been criticized by administration officials for a cost overrun.
Trump sprung a new, higher cost estimate for the project on Powell while the cameras were rolling. Powell quickly read the document and then dismissed it as containing an extraneous line item.
Market observers are indeed seeing all the pressure as manifesting in the Bowman and Waller dissents.
“Two Fed governors dissent against Powell … First time in 30 plus years,” commentators for Geiger’s Capital Gains wrote social media platform X. “Both hoping to be the next Fed chair. Not even the Federal Reserve can withstand the power of Trump’s political influence.”
Powell also remarked Wednesday about slowing growth in the economy and downside risk to the labor market.
Gross domestic product (GDP) came in at a robust 3 percent for the second quarter on Wednesday, but the number reflected further import distortions coming from Trump’s trade war.
Private domestic final purchases, a stand-in for the GDP number that takes out net export effects, showed 1.2 percent growth — the same as overall GDP growth pace taken over the first half of this year.
“Growth of economic activity has moderated,” Powell said in his opening remarks.
