Jerome Powell wasn’t exaggerating last week when he said there were “strongly different views” on the Committee regarding the relative wisdom of cutting rates further.

Recall that Powell described September’s cut as a “risk management” adjustment. Depending on your interpretation, that characterization was at odds with the dot plot refresh which (however narrowly) tipped 50bps of additional easing over the balance of the year.

The Fed of course delivered half of that 50bps in October, but Jeffrey Schmid would’ve rather they didn’t. As it turns out, he wasn’t alone.

“This economic outlook didn’t call for cutting rates,” Lorie Logan said late last week, at a banking conference convened by the Dallas Fed. Logan doesn’t vote currently, but if she did… well, I’ll let her explain it:

I did not see a need to cut rates this week. And I’d find it difficult to cut rates again in December unless there is clear evidence that inflation will fall faster than expected or that the labor market will cool more rapidly. The risks to the labor market do lie mainly to the downside [but] the remaining risks to employment are ones we can monitor closely and respond to if they are becoming more likely to materialize, not ones that currently warrant further preemptive action. Our obligation to the public is to deliver on [our inflation] commitment.

Suffice to say Logan won’t be in the running for any sort of promotion, formal or otherwise, as long as Donald Trump’s president. Neither will Beth Hammack.

“I would have preferred to have held rates steady at this meeting,” Hammack said, at the same event. “I do think we need to maintain some amount of restriction to help get inflation back down to target.”

Hammack will vote in 2026. So will Logan. Unless they’ve committed mortgage fraud. Bill Pulte’s probably on the trail. I’m just kidding. But not.

Neel Kashkari will rotate into the voting panel next year too, and there’s no guarantee he’ll support a cavalier approach to cutting rates. Barring a sharp deceleration in hiring and growth, Powell won’t either. Assuming he’s willing to support a cut in December, that’ll probably be the last move Powell’s comfortable countenancing in the absence of a plausible recession narrative.

Chris Waller sounds like he’s going to keep pushing for cuts, and I assume Miki Bowman will vote with him if push comes to shove. Stephen Miran’s position on the Board’s unclear from January, but in the event Trump decides to replace him, the next person to occupy that seat will be at least as partisan as Stephen, if not more so.

The stage is thus set for a showdown. If the data doesn’t warrant cuts early next year, Trump’s going to need backup. Waller, Bowman and whoever occupies Miran’s seat won’t be enough. Cook’s fate on the Board remains undecided. That’s up to John Roberts.

The figure above gives you a sense of how the Fed’s splintering.

“The growing division on the Committee becomes increasingly clear with each rate decision,” BMO’s Ian Lyngen remarked, noting that in addition to being the third straight meeting with a dissent and the first two-sided dissent since 2019, October’s votes against the decision were the sixth and seventh since the normalization process began.

The discord reflects “a Fed that is becoming polarized at a moment of extreme economic uncertainty,” Lyngen went on. “No matter the decision, there is a good chance we see multiple dissents at December’s meeting.