Fed Minutes Show Waller, Bowman Alone in Push for July Rate Cut
Central bank held rates steady as dissenters pressed for a modest cut; markets now look to September and Powell’s Jackson Hole speech.
Washington, August 20 EST: The Federal Reserve’s July meeting minutes landed Wednesday with a blunt reminder of just how little appetite there was for a rate cut inside the central bank. Aside from Governors Michelle W. Bowman and Christopher J. Waller, who both voted for a quarter-point reduction, the rest of the committee closed ranks around holding the line at 4.25% to 4.50%.
A Lonely Push for Cuts
The July 30 statement showed the dissent on paper. The minutes confirm it in tone, “almost all” policymakers backed staying put; “a couple” wanted a cut. That wording matters. It signals Bowman and Waller weren’t part of some hidden faction but effectively standing on their own. Adriana D. Kugler, absent from the meeting, wasn’t part of the debate.
The fault line isn’t philosophical so much as tactical. Most around the table are waiting for tariff effects and labor data to settle before moving. Waller and Bowman, on the other hand, argued that the Fed risks sitting on its hands while growth softens a delay they believe could prove more costly than an early trim.
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Explaining the Dissent
Both dissenters doubled down in early August. Waller said a 25-point cut was the logical follow-through on his July remarks warning of unnecessary drag on hiring. Bowman echoed that call, arguing for a “measured” step to take pressure off without sparking inflation. Neither convinced colleagues.
In Fed shorthand, “a couple” is a small camp. When the minutes don’t hint at “several” or “many,” markets know the debate wasn’t close.
Traders Looking Ahead
The irony is that investors were already pricing in what Waller and Bowman wanted. By the time the minutes hit at 2 p.m. Wednesday, CME FedWatch odds showed about an 85% chance of a September cut. That conviction isn’t about July it’s about what came after. Weak labor reports earlier this month tilted Wall Street’s bets toward a September move, regardless of how cautious the July room sounded.
That explains why markets barely flinched. Stocks sagged during the day, led by tech, but the drop was more about positioning ahead of Jackson Hole and thin summer trading than any shock from the Fed’s record. As Reuters noted, the minutes were already stale against fresher data.
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The Real Test Comes in September
The takeaway is straightforward July was a holding pattern, and the dissent was isolated. But the Fed isn’t locked into that stance. The September 16–17 meeting is where the weight of weaker hiring, tariff impacts, and global jitters will show up in the votes.
For now, Powell’s Jackson Hole speech later this week is the next inflection point. If he hints at a pivot, Bowman and Waller may not look so alone. If he holds steady, the message will be that the Fed is content to let markets keep betting while policymakers keep watching.
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A Wall Street veteran turned investigative journalist, Marcus brings over two decades of financial insight into boardrooms, IPOs, corporate chess games, and economic undercurrents. Known for asking uncomfortable questions in comfortable suits.
