Fed mouthpiece: Powell is not the biggest obstacle to rate cuts; Fed's internal consensus mechanism is on the verge of collapse.

On November 22, Nick Timiraos, a vocal critic of the Federal Reserve, wrote that Trump stated this week that he expects interest rates to fall sharply after a new Fed chairman is appointed next May. However, opposition within the Fed to a December rate cut is growing, meaning his wish may be difficult to fulfill.

Whether Powell chooses to hold rates steady or cut them in December, he faces the most severe internal resistance in his nearly eight-year term. This division could extend into next year, meaning that even a change of chairman does not guarantee more rate cuts. Some worry that if Trump fails to achieve his desired outcome, he might resort to more aggressive measures to undermine the central bank's independence in exchange for rate cuts.

For more than 30 years, Federal Reserve chairs have sought the broadest possible consensus on interest rate decisions, with no decision ever passed by a narrow majority. However, the December meeting is highly likely to see three or more dissenting votes.

Evercore ISI economist Krishna Guha stated that we are witnessing a breakdown in the decision-making process, and next year we may see a severe split within the committee. (December) feels like a preview of 2026. This suggests an unprecedented prospect: monetary policy outcomes may be decided by a rare, narrow majority (rather than the long-standing tradition of pursuing broad consensus), and the new chairman appointed by Trump may not be able to control the situation every time. (Jinshi)