Rate Decision Preview: Increasing Voting Divide, Risk of "Three-way Struggle"

On September 17th, the Fed is divided between hawks and doves. Multiple institutions have made predictions on the interest rate cut as follows: 1. Citibank: It is highly likely that three voting members will support a 50-basis-point rate cut at this meeting, namely Fed governors Waller, Bowman, and Mester. 2. Morgan Stanley: It is expected that the Fed will decide on a 25-basis-point rate cut, but the newly appointed Fed governor Mester will hold a different view and advocate for a 50-basis-point rate cut. 3. JPMorgan Chase: The Fed is expected to decide on a 25-basis-point rate cut. During the voting process, it is expected that 2-3 attendees will dissent and support a 50-basis-point rate cut. 4. Rabobank: In this meeting, Milan will undoubtedly join the dissenters Bowman and Waller from July in supporting a rate cut and may even support a larger 50-basis-point cut. 5. Rabobank International: Waller and Bowman may vote to support a larger rate cut. The newly appointed governor Milan by Trump may join this camp. Although we doubt he will ultimately vote in favor of a 50-basis-point cut. 6. SPI Asset Management: There may be 2 or 3 members within the Fed supporting a 50-basis-point rate cut, while the rest support a 25-basis-point cut. Powell may change his previous stance and support a 25-basis-point cut to counter Trump. Or there may be three types of voting patterns: 1. Deutsche Bank: At this meeting, within the "dovish" camp, as many as three members may call for a 50-basis-point rate cut. In the "hawkish" camp, one or two people may vote to not cut rates. 2. Wrightson: The Fed meeting may see opposing views. Waller, Bowman, and Mester may advocate for a 50-basis-point rate cut, while some regional Fed presidents may support a hold. 3. ANZ Bank: The Fed's interest rate decision this time will not be unanimous. At least one official (Mester) is expected to support a 50-basis-point cut. At least another official (Schmidt) may oppose the policy adjustment. (FXStreet)