Powell forced to stave off uprisings in markets and on his own Fed board as his term ends

Core Viewpoint - The Federal Reserve, under Chairman Jerome Powell, is navigating a complex and contentious environment as it approaches a potential interest rate decision in December, with significant implications for Powell's legacy as his term nears its end [2][4]. Interest Rate Decisions - The Fed recently approved a quarter percentage point rate reduction, lowering the benchmark rate to 3.75%-4%, but Powell emphasized that another cut in December is not guaranteed, contrary to market expectations [3][6]. - Market participants are divided on whether the Fed will approve another rate cut at the upcoming December meeting, indicating a pivotal moment for Powell [4]. Market Reactions - Following the Fed's announcement, markets reacted negatively, with stocks declining and Treasury yields rising, particularly the 10-year Treasury yield surpassing 4% [7]. - Despite Powell's hawkish rhetoric, traders still assigned a 75% probability to a December rate cut, although this was a decrease from 90% the previous day [5]. Internal Fed Dynamics - There are "strongly differing" views within the Federal Open Market Committee (FOMC) regarding future policy directions, highlighting a lack of consensus among policymakers [6][11]. - Powell's acknowledgment of dissenting opinions within the FOMC suggests a complex internal landscape as he attempts to balance various perspectives on monetary policy [12]. Political Context - Powell's position is further complicated by political pressures, as he faces criticism from President Trump and potential scrutiny regarding his successor, with Treasury Secretary Scott Bessent interviewing candidates [10].