The Federal Reserve’s internal rift over the future of interest rates may be headed for a historic test next month. Analysts now warn that the central bank’s December rate-setting meeting could end in a tie for the first time, underscoring just how divided policymakers have become over whether more monetary easing is warranted.
According to Fortune, economists say the possibility of a deadlock is more than a theoretical risk. The Federal Open Market Committee (FOMC), which sets the benchmark federal funds rate, currently has an even number of voting members—an arrangement that makes a tie mathematically possible if opinions split down the middle. The structure includes seven members of the Federal Reserve Board of Governors, the president of the New York Fed, and four presidents of the remaining 11 regional banks, who rotate their voting privileges annually.
The rotation system groups the regional banks into four clusters: Boston, Philadelphia and Richmond; Cleveland and Chicago; Atlanta, St. Louis, and Dallas; and Minneapolis, Kansas City and San Francisco. Those rotations ensure regional representation but, in this case, also help set the stage for an evenly divided vote.
Economists at Capital Economics have tried to assess the current lineup. They noted that Governors Michelle Bowman, Stephen Miran, and Christopher Waller—each appointed by former President Trump—have publicly called for additional rate cuts. New York Fed President John Williams has also suggested there’s “room for a further adjustment in the near term.” On the other side, regional bank presidents Susan Collins of Boston, Austan Goolsbee of Chicago, Alberto Musalem of St. Louis and Jeffrey Schmid of Kansas City have urged caution about cutting too soon. Fed Governors Michael Barr and Philip Jefferson have expressed similar restraint.
Capital Economics observed that Williams and Chair Jerome Powell frequently vote in alignment, as does Governor Lisa Cook with Powell. That pattern, analysts say, could leave the committee deadlocked at 6–6.
Powell himself has publicly reflected on that tension. At the end of October, he cautioned that “a further reduction in the policy rate at the December meeting is not a foregone conclusion.”
His remarks echoed uncertainty across the Fed’s leadership following an extraordinary streak of divided votes earlier this year. Two members dissented at both the July and October meetings—the first time in three decades that multiple members opposed a decision. In October, Miran had argued for a steeper 50-basis-point cut instead of the approved quarter-point move, while Schmid preferred to hold rates steady.
Close votes are rare at the Fed. Christopher Hodge, chief U.S. economist at Natixis CIB Americas, noted in July that there have been only three instances of an FOMC rate decision passing by a single vote, the last occurring in 1973. Still, if the December meeting ends in a stalemate, the outcome is clear. The FOMC’s rules contain no procedure to break a tie, and as former Atlanta Fed research director Robert Eisenbeis told Fortune, that would mean the federal funds rate stays exactly where it is.
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