"Deutsche's Jim Reid noted to clients this morning: "There is likely to be differing views within the committee. On the dovish side there could be three calling for a 50bp cut and possibly one or two voting for no change. It has the potential to be the first meeting where three governors dissent since 1988, and the first with dissents on both sides since September 2019.""
"A gamut of perspectives on the FOMC is not unusual: After all, there are 11 people on the committee, with an additional five alternate members, further individuals on the board of governors, and economists from across the country also presenting their findings. Some difference of opinion is not only to be expected, but welcomed in order to paint a full picture of the economy."
"Wall Street is pricing in a rate cut at this week's Fed meeting, but Deutsche Bank's Jim Reid warns dissent could be the sharpest in decades, with some governors pushing for a deeper cut and others for no change. The split underscores tensions facing Jay Powell as weak jobs data bolsters dovish voices, even as some policymakers argue financial conditions remain far from restrictive."
Wall Street expects a rate cut at the upcoming FOMC meeting, driven by mild inflation and weakening jobs data that pushed bond investors to price out a hold. Deutsche Bank warns of notable dissent within the committee, with some members potentially calling for a 50bp cut while others may vote to keep rates unchanged. Three dissenting governors would be the first occurrence since 1988, and simultaneous dissents on both sides would mirror 2019. A range of viewpoints exists across committee members, alternates, governors, and regional economists, and strong internal disagreement would signal elevated policy tensions and market uncertainty.
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