It wasn’t a surprise. Yesterday Jerome Powell left interest rates in the U.S. unchanged. Everybody knows that Donald Trump is unhappy about this, but he isn’t the only one. There was dissent amongst the governors of the Federal Reserve too. Who are these disruptors, and what made them dissent?

The dissent took place in the Federal Open Market Committee (FOMC), which consists of twelve members. The seven members of the Board of Governors of the Federal Reserve System, the president of the Federal Reserve Bank of New York, and four of the remaining eleven Reserve Bank presidents. Governor Waller and Vice Chair Bowman have expressed views favoring rate cuts, differing from Powell’s stance.

Who is Governor Christopher Waller?

Calls for the Fed to lower the interest rate by at least 25 basis points were led by many observers. Tariffs are going to be clear by August 1, unemployment is stable, and the economy is in good shape. However, Governor Waller advocated for a rate cut but was outvoted by the FOMC majority.

It has been many years since the Fed’s seven-person Board of Governors has had any significant dissent. And, although this week’s dissent is worrying, market commentators are not overly concerned. Christopher Hodge, Chief U.S. Economist at Natixis commented on the dissent. He doesn’t think “there is much disagreement on the economics between Waller and the rest of the FOMC.”  

However big the disagreement might be, Waller is being seen by many as a potential replacement for Jerome Powell, whose term expires in May 2026. He joined the Board of Governors at the Fed in December 2020. Previously he served as executive vice president and director of research at the Federal Reserve Bank of St. Louis. He has previously been a professor of macroeconomics and monetary economics at the University of Kentucky. He is a well-recognized economist.

What Is Governor Waller’s Argument for Rate Cuts?

On July 17 Governor Waller’s “Case for Cutting Now” was published on the Fed’s website. In it, Waller argued for a 25-basis points reduction of the interest rate. He listed three arguments to defend his argument:

“First, tariffs are one-off increases in the price level and do not cause inflation beyond a temporary surge.

“Second, a host of data argues that monetary policy should be close to neutral, not restrictive.

“Finally, we should not wait until the labor market deteriorates before we cut the policy rate.”

Jerome Powell clearly wants to wait and see, whilst Waller believes that delaying may harm a fragile labor market.  

Who is Vice Chair Michelle Bowman?

Michelle Bowman is a very influential member of the Fed Board. While Waller focuses on monetary policy, Bowman’s role as Vice Chair for Supervision centers on bank regulation.

She took office as the Vice Chair for Supervision of the Board of Governors of the Federal Reserve System in June 2025.

Previously Ms. Bowman had served as a member of the Board of Governors from 2018. She also worked as a state bank commissioner of Kansas, as well as vice president of Farmers & Drovers Bank in Kansas. However, her earliest experience was in Washington D.C. working for Senator Bob Dole of Kansas and later as a counsel to the U.S. House Committee on Transportation and Infrastructure, amongst others. Her educational background is journalism and law.

Ms. Bowman’s most recent speeches listed on the Fed’s site are about expanding financial inclusion and unintended policy shifts and unexpected consequences. Her role isn’t as strongly related to economics as that of Governor Waller.

Ms. Bowman was nominated as vice chair for supervision by Donald Trump in March this year. She is described as a former community banker and frequent critic of overzealous bank regulation. In a statement at the time, Bowman thanked Trump for the nomination and said she would pursue “a pragmatic approach to supervision and regulation with a transparent and tailored bank regulatory framework that encourages innovation.”

The Fed meeting this week was her first big test. The next one will be in September.

Could the Fed lower Interest Rates This September?

The next meeting of the Governors of the Federal Reserve takes place on September 16 – 17. By then we will have a better understanding of how tariffs are affecting inflation and the job market. August 1is the deadline for tariff negotiations that started in April with Liberation Day.

Donald Trump hopes that by the next FOMC meeting in September, Chairman Powell might finally lower interest rates.

With two Consumer Price Index (CPI) reports and two payroll runs to take place before the next rate discussion at the Fed, there is a lot more data that the Fed is keen to analyse.

Will there be more dissenters in the future? It’s possible.

Author: Andy Samu

See Also:

Is Jerome Powell worried about Elon Musk’s DOGE? | Disruption Banking

ECB Cuts Rates Amid Euro Strength and Shifting Safe Haven Dynamics | Disruption Banking

Is The Fed’s Interest Rate Decision Political? | Disruption Banking