"Fed Mouthpiece": Powell Faces a Do-or-Die Battle as Half of His Colleagues Oppose Rate Cuts

BlockBeats News, December 9 — Nick Timiraos, a Wall Street Journal reporter known as the “Fed whisperer,” wrote that Federal Reserve officials will hold their final two-day policy meeting of the year on Tuesday local time, and as many as half of the members in the meeting room may not support a rate cut. However, the final decision still rests with Chairman Powell, who, despite facing rare opposition, appears prepared to push for a rate cut. The central focus of this week’s meeting is whether Powell can build enough consensus to reduce the number of dissenting votes. One possible path to achieve this goal would be to lower the interest rate by 25 basis points to a range of 3.5% to 3.75%, and then signal a higher bar for further easing through changes to the post-meeting statement. Among the Fed’s policy committee’s 12 voting members, as many as 5, and 10 out of all 19 members, have stated in speeches or public interviews that they do not see a strong case for a rate cut. Of these, only 1 formally cast a dissenting vote on the Fed’s rate cut decision in October (another governor took the opposite stance, advocating for a larger rate cut). Last month’s delayed September nonfarm payrolls report showed job growth exceeded expectations, but the unemployment rate rose to 4.4% (the highest since the end of 2021), and August data was revised down to negative growth. The key question is whether the slowdown in job growth reflects weak labor demand (which supports a rate cut) or a contraction in labor supply due to reduced immigration (which argues against a rate cut).