Overall Picture
Typically, observers of the Federal Reserve do not put much effort into counting votes. The monetary policy committee reaches a consensus decision, and if there is one or two dissenters, it is at best a footnote.
But these are not normal times. The details of the vote count matter in light of political disagreements. Consider one particularly strange – yet entirely plausible – way that the votes could be distributed.
Current State of Affairs
If the leading triumvirate – Chair Jerome Powell, Vice Chair Philip Jefferson, and New York Fed President John Williams – decide that a rate cut is necessary, they will likely be joined by three Trump-appointed governors on the committee: Michelle Bowman, Stephen Moore, and Christopher Waller.
But that gives them only six votes out of the 12 voting members of the FOMC. They need a seventh for a majority.
Where to Find the Seventh Vote?
All four presidents of the non-New York reserve banks who have a vote at this meeting (Austan Goolsbee from Chicago, Susan Collins from Boston, Alberto Musalem from St. Louis, and Jeff Schmid from Kansas City) have expressed reservations about a rate cut.
This does not guarantee that they will all dissent, of course (Goolsbee was noncommittal on Thursday, saying: "I want to hear what my colleagues have to say"). But it is quite possible.
In such a scenario, there are two Biden-appointed governors that Powell could turn to for his majority.
One of them is Michael Barr, who appears very concerned about inflation right now and advocates for caution. The long-standing norm that governors do not express dissent has been shattered over the past 14 months. So he could plausibly vote "no."
Irony of Fate
This leaves one more Biden-appointed governor that Powell could turn to for his seventh vote. This is an official who is very focused on the health of the labor market and keeps his views on the next political move to himself.
This governor, of course, is Lisa Cook.
The U.S. Supreme Court is set to hear a case on whether President Trump can remove her, as he has been trying to do since the fall, on January 21.
In other words, the fate of the Fed's rate cut may hinge on the vote of an official whom Trump is actively trying to dismiss, and the Supreme Court is set to decide her fate just a month after the key vote.
