Fed Holds Rates Steady; Two Officials Call for Cut in Unusual Split Vote
As expected, the U.S. Federal Reserve held its benchmark interest rate steady at 4.25% to 4.5% on Wednesday, but the decision came with a notable twist: two members of the Federal Open Market Committee (FOMC) dissented, calling for a rate cut.
Governors Michelle Bowman and Christopher Waller favored a 25-basis-point reduction, marking the first instance of two dissenting votes on a Fed policy decision since 1993, according to Carson Group’s Chief Market Strategist Ryan Detrick.
In its statement, the Fed said, “While fluctuations in net exports continue to influence the data, recent indicators suggest economic activity moderated in the first half of the year. The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.”
Markets responded cautiously. Bitcoin (BTC) dipped nearly 0.5% to $117,400 shortly after the announcement, while the S&P 500 and Nasdaq erased earlier gains.
Notably, a large bet had been placed on the outcome via Polymarket, a blockchain-based prediction platform. A trader known as “Spice” reportedly wagered close to $1.3 million on the Fed holding rates steady, according to on-chain data cited by Lookonchain. As the announcement approached, the trader trimmed the position to $724,000. Market odds had priced in a 98% chance of no change.
Investors are now focused on Fed Chair Jerome Powell’s press conference at 2:30 p.m. ET for guidance on the potential for rate cuts in September. Powell has been under increasing pressure from the White House, particularly from President Trump, to ease monetary policy.
According to CME FedWatch, the probability of a rate cut in September stood at nearly 60% prior to Wednesday’s meeting—an outlook that could shift depending on Powell’s tone.
