The Federal Reserve is on the brink of internal disagreements—cut rates or not? Powell will set the tone in the remaining three meetings.

【ChainWen】Recently, we’ve been watching the Fed’s moves and feel like they are about to clash internally. Although they’ve cut interest rates again—this is the third consecutive time—the disagreement within the committee about the future direction is huge.

The core contradiction is obvious: inflation is still high, and the labor market is starting to cool down. This kind of deadlock situation hasn’t been seen in decades. It’s somewhat reminiscent of the stagflation in the 1970s, when the Fed was hesitant and kept shifting policies, ultimately allowing high inflation to become a stubborn disease.

The current issue is that officials are clearly not interested in further rate cuts. Powell’s term expires in May next year, meaning he can only chair three more rate meetings. The final decision will likely depend on how he pushes.

UBS chief economist Jonathan Pingle said quite straightforwardly: “The closer interest rates get to the neutral level, the harder it becomes to reach consensus with each cut. You need enough solid data to persuade those opposing to side with rate cuts.”

In plain terms, the future monetary policy path is full of uncertainties, and the data quality directly influences the Fed’s stance.