Frequent disagreements at future Federal Reserve meetings may increase market volatility risks

News on December 2, the Federal Reserve is sometimes criticized for being overly focused on decision-making consensus, but in the future, a series of split votes on interest rate issues may occur, which could weaken the effectiveness of its policy signals. Regardless of the outcome of this meeting, the possibility of multiple dissenting votes is high. Among the 12 voting members of the committee, as many as five have expressed opposition or skepticism toward further rate cuts, while three governors are in favor of rate cuts. Al-Hussain, fixed income investment manager at Threadneedle, stated: "If a 7:5 split occurs, it will be chaos for the rates market trying to price a reasonable path for interest rates over the next 12 to 18 months. For risk assets seeking certainty in Federal Reserve policy, it will also be chaos." BNY Mellon Investment Management believes: The policy outlook for 2026 will be rooted in political economy—when will the White House secure a majority on the Federal Reserve Board? If a series of dissenting votes are cast by regional Fed presidents, should the Board take action in the selection of these presidents? Should Congress take measures to change the current situation where officials not appointed by the President and not confirmed by the Senate have voting rights on monetary policy?