‘Quiet Pushback’ Highlights Rising Fed Opposition to Powell’s Rate Cuts

Federal Reserve Chair Jerome Powell attempted to play down the dissent surrounding Wednesday’s latest interest-rate cut, but the finer details from the meeting painted a clearer picture: the central bank is becoming increasingly split.

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Powell steered the Fed toward another quarter-point reduction, pushing the decision through despite objections from several voting members. Even more notable, a larger group of regional Fed presidents who participated in the discussions but did not hold a vote this year also signaled they were against lowering rates. The widening divide offers a glimpse of the challenges ahead in 2026, when a new Fed chair may find it even harder than Powell to maintain cohesion inside the central bank.

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“This is unusual. In my more than a decade of working closely with the Fed, I haven’t seen anything quite like it,” said Patrick Harker, who retired as president of the Philadelphia Fed in June.

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Although only two officials Kansas City Fed President Jeff Schmid and Chicago’s Austan Goolsbee formally dissented in favor of keeping rates unchanged, and Governor Stephen Miran dissented in favor of a larger cut, the discontent extended well beyond the three votes. Much of the remaining pushback surfaced in other forms.

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One major signal came from the Fed’s quarterly rate projections released alongside the decision. Six policymakers indicated that the federal funds rate should finish 2025 in the 3.75% to 4% range exactly where the benchmark sat before Wednesday’s rate cut. The implication was clear: these officials likely opposed the move. Because at least four, and possibly all six of these policymakers, were non-voters this year, some analysts have labeled these projections as “silent dissents.”

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“I would have been one of those silent dissents,” Harker said. “I think the cut was a mistake.”

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Another indicator of the internal divide was tucked into materials released Wednesday. Beyond the policymakers around the table, the Fed also receives input from the boards of directors of its 12 regional banks. These boards submit recommendations for a separate short-term rate that historically mirrors their respective presidents’ preferences. Only four banks recommended a rate cut. That suggests eight regional presidents favored holding rates steady.

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This pattern underscores an often-observed dynamic: regional presidents tend to lean toward higher interest rates compared with the Fed governors in Washington, who are appointed by the president and confirmed by the Senate.

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During his post-meeting press conference, Powell argued that today’s economic environment marked by inflation still running above the Fed’s 2% goal and a labor market losing momentum naturally breeds disagreement among policymakers. “A large number of participants agree that the risks are skewed to the upside for unemployment and to the upside for inflation. So what do you do?” he said. “You’ve got one tool, and you can’t address both risks at the same time. It’s a very challenging situation.”

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But with so many officials signaling both quietly and openly that they would have preferred a different outcome, whoever President Donald Trump chooses to replace Powell next year is likely to face significant hurdles in managing the Federal Open Market Committee. Kevin Hassett, director of the White House National Economic Council and the leading candidate for Fed chair, would inherit a deeply divided panel.

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“Powell has served a long tenure and has earned enormous respect inside the FOMC,” said Calvin Tse, head of US strategy and economics at BNP Paribas. “If we’re already seeing three dissents under his leadership, I find it hard to imagine a new chair stepping in and finding it easier to achieve unanimous agreement.”

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