Contrary to expectations, 11-to-1… Only Trump loyalist Myron for "big cut"

The rest of FOMC members backed the 'baby cut'

Two pro-Trump members also agreed with Powell

Also interpreted as "supporting Fed independence"

Markets will watch Myron's future 'comments'

The most closely watched aspect of the Federal Reserve's September policy decision was the actions of Steve Myron (photo), who took office as a Fed governor on the 15th. Myron is a "Trump loyalist" who moved directly from chair of the White House Council of Economic Advisers (CEA) to a Fed governorship. He was barely confirmed by the Senate with 48 votes in favor and 47 against just before the FOMC meeting.

At the monetary policy meeting held on the 17th (local time), Myron was the only dissenting vote, opposing a 0.25 percentage point rate cut. Of the 19 participants who attended the FOMC, 12 have voting rights, and of those 11 supported a "baby cut" (a 0.25 percentage point cut) rather than a "big cut" (a 0.5 percentage point cut).

Governors Christopher Waller and Michelle Bowman, who had argued for rate cuts in July, also voted for a 0.25 percentage point cut. Although President Donald Trump classifies them as pro-Trump figures who share his views, this shows that they differ from Governor Myron, who was genuinely brought in to carry out the president's wishes. TD Securities interpreted in its FOMC analysis report that Waller and Bowman not supporting a "big cut" was "an expression of support for the Fed's independence." Fed Chair Jerome Powell said at the press conference, "There was no broad support for a 0.5 percentage point cut," and added, "We acted with a high degree of unity at the meeting."

The median of the year-end rate projections reflected in the dot plot was at an annual 3.5–3.75% level, but one member, presumed to be Governor Myron, marked 2.75–3.0% annual. That is an aggressive target that would require another 1.25 percentage points of cuts over the remaining two meetings to achieve.

Myron's term runs until January next year. He was appointed to fill the remainder of the term of Governor Adriana Kugler, who resigned on August 8. To enable his participation in this FOMC, Republicans shortened the Fed governor confirmation process, which normally takes several months, to six weeks. He is also keeping the White House CEA chair position in a leave-of-absence status.

This is the first time a U.S. administration official has become a Fed governor since the 1935 amendment to the Banking Act that stipulated the Fed's independent operation. When this issue was raised as the first question at the press conference, Powell replied, "As always, we welcomed the new governor," adding, "The committee is united in achieving our dual mandate and is strongly committed to maintaining independence, and I have nothing further to say on that."

FOMC participants may speak publicly starting two days after the meeting. Governor Myron will also be able to appear in the media or express his views via social media, op-eds, and the like starting on the 19th. Until now, it had been administration officials such as President Trump and Treasury Secretary Scott Bessent pressing the Fed, but going forward the situation will shift to a 'conflict within the Fed.'

Washington=Sang-eun Lee, correspondent selee@hankyung.com