Jerome Powell defies Trump one last time, holding rates steady: ‘The facts have moved decisively in the hawkish direction,’ top economist says

The Federal Reserve held interest rates steady on Wednesday in what is very likely Jerome Powell’s final policy decision as chair, leaving the Federal funds rate in the range of 3.5% to 3.75% for a third meeting in a row and defying President Trump’s persistent demands to sharply lower rates. 

But beneath the headline decision, four striking dissents reveal a committee pulling in opposite directions just weeks before Kevin Warsh, Trump’s nominee, is expected to take over as chair.

Stephen Miran, the Trump-appointed governor who has been the Federal Open Market Committee’s most vocal dovish voice, dissented in favor of a quarter-point cut. That’s not a surprise—Miran, whom Warsh would replace, has dissented a number of times. But other dissents were more unexpected: Beth Hammack, Neel Kashkari, and Lorie Logan voted for the hold but dissented against the inclusion of an “easing bias” in the statement, the line indicating the committee will consider “the extent and timing of additional adjustments” to rates. Basically, these three Fed officials wanted to slam the door on cuts entirely, but were outvoted. 

“The facts of the matter have moved decisively in the hawkish direction,” Skanda Amarnath, executive director of Employ America, told Fortune. ...