Fed Update: The Dissenting Vote

So I've covered last week's interest rate cut, but a word came out that there was a dissenting vote.

11 FOMC Members voted for a standard 25 bps cut.
1 FOMC Member (Steven Mirren - a Trump appointee recently from the White House) voted for a more aggressive 50 bps cut.

This matters because Mirren, with access to non-public White House data, saw something concerning enough to warrant a much larger stimulus. The question is, what does the WH know that justifies a double-sized cut? This dissent underscores the underlying economic risks Powell alluded to.

Impact & Outlook

• Today markets sold off on the reduced certainty of future rate cuts. The hope for a quick series of cuts has been dampened.
  
• The Fed is now firmly in a "meeting-by-meeting" mode. I do not expect a pre-set easing path. Future decisions will hinge entirely on incoming data, especially inflation reports and jobs numbers.
  
• Powell pointed to policy uncertainty (tariffs, etc.) causing businesses to postpone hiring and investment, and a sharp drop in immigration reducing labor supply.
  

Implications

• USD: Bullish. A patient Fed with a restrictive stance supports the dollar.
  
• Equities: Bearish in the short term. The removal of the "Fed put" narrative and heightened uncertainty could lead to continued volatility and pressure on growth stocks.
  
• Treasuries: Yields may stabilize or rise slightly as expectations for deeper cuts are priced out.
  

The Fed is walking a tightrope, and it really tells to prepare for heightened volatility driven by each new data point.