Author: Long Yue
With less than two weeks until the Fed's September 16 interest rate meeting, the voting landscape is tightly divided, and Powell's silence has become the market's biggest uncertainty.
Jim Bianco, founder of Bianco Research, posted on social media that, in addition to the博弈 of macroeconomic data, voting outcomes are becoming a key factor influencing the current direction of Fed policy. He wrote:
I’ve always believed that watching the Fed right now is just counting votes.
Following recent remarks by Federal Reserve Governor Waller indicating a preference to hold rates steady, Bianco has mapped the current voting alignment as 6 votes (to hold) versus 5 votes (to hike), with one vote still uncertain—that of former Chair Powell (Powell’s term as Fed Chair ended on May 15 of this year, but he continues to serve as a Fed governor).
Bianco's individual vote tally
Powell: Deliberately Low-Key, Yet a Key Variable
Bianco noted that Powell has not made any public statements since the May press conference, "and he wants to step back from the spotlight."
In Bianco’s view, this strategy stems from Trump’s persistent criticism of the Federal Reserve, which has made committee members wary of their independence, leading FOMC voters to gradually shift toward more explicit public statements to anchor their positions.
However, Powell's silence has now created uncertainty. Bianco wrote:
If everyone votes according to their public statements, Powell's vote will be decisive.
Probability of rate hike: Already 50/50
Bianco's conclusion is direct and clear:
That's why, with less than two weeks until the meeting, the probability of an interest rate hike was already 50/50.
On August 30, he had previously predicted that the vote on September 16 would be 7 to 5, but the direction was still uncertain—“I just wasn’t sure whether it would be a 7-to-5 hike or a 7-to-5 hold.”
Currently, with Waller siding with the hold camp, the hold faction holds a narrow 6-to-5 lead, but Powell’s vote remains decisive, leaving the final outcome uncertain.
Bianco believes that Trump's ongoing pressure on the Federal Reserve is essential context for understanding the current division in voting positions.
He noted that, due to concerns about independence, FOMC members have increasingly favored making public statements to clarify their individual positions rather than relying on internal negotiations to reach consensus. This has enabled outsiders to more clearly track policy directions through "vote counting."
Since 1936, there has never been a 6–6 vote. The closest occurrences were 6–5 votes in 1963, 1964, and 1973. The U.S. Federal Reserve Act contains no provisions for tie votes. He wrote:
Presumably, this means maintaining the status quo, as no agreement has been reached, and the Federal Reserve will continue to keep the federal funds rate unchanged. Of course, they could agree to hold a second (or third) vote until a tie is broken.
