Federal Reserve shows unexpected unity, independence as it weathers
Trump's attacks
[September 18, 2025] By
CHRISTOPHER RUGABER
WASHINGTON (AP) — The Federal Reserve's nearly-unanimous decision
Wednesday to reduce its key interest rate was seen by many observers as
a quiet show of unity and independence amid President Donald Trump's
relentless pressure for steeper cuts and his unprecedented effort to
fire a top Fed official.
Many Fed-watchers expected a contentious two-day meeting this week, with
the economy's future uncertain and a Trump appointee hastily added to
the board just hours before the meeting began. The White House has also
floated several members of the Fed's governing board as potential
replacements for the current chair, Jerome Powell, when his term ends in
May, creating incentives for those officials to push for the deep rate
cuts Trump has demanded.
Some economists expected as many as three dissenting votes among the 12
voting members of the rate-setting committee, which would be the most in
five years and somewhat unusual for a consensus-driven organization.
Even four dissents — which hasn't happened since 1992 — weren't out of
the question.
Trump has appointed three members to the Fed's governing board — two in
his first term — all of whom could have voted in favor of steeper cuts.
And many officials on the rate-setting committee are wary of cutting too
quickly, with inflation still clearly above the Fed's 2% target. Some
observers thought one of those policymakers could dissent in the other
direction — in favor of not cutting rates at all.
Instead, just one official dissented from the Fed's decision to reduce
its rate by a quarter-point: Stephen Miran, who was nominated by Trump
to an empty seat and hurriedly approved by the Senate late Monday, just
hours before the two-day meeting began.
Brian Bethune, a Boston College economist, was impressed by the Fed’s
unity in the face of White House pressure.
“They all came together to support what seems to be a very balanced
decision,’’ he said. The nearly unanimous vote "sends a very strong
message that they’re not going to bow to the monarch. They’re going to
do what’s appropriate for the economy.’’
Trump has said that one of the Fed governors he appointed in 2018 —
Christopher Waller — is a potential replacement for Powell, and Waller
dissented in favor of a rate cut in July, when the Fed kept borrowing
costs unchanged. Another Trump appointee from his first term, Michelle
Bowman, also dissented in July. Yet on Wednesday they both voted with
their colleagues.
On social media, Jason Furman, a top economic adviser in the Obama White
House, posted that he was “thrilled’’ that Trump appointees Bowman and
Waller did not join in Miran's dissent. “Bodes well for the Fed’s
independence,’’ wrote Furman, now an economist at Harvard University.
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 In the weeks leading up to the
meeting, Trump sought to fire Fed governor Lisa Cook, who was
appointed by former president Joe Biden, after accusing her of
mortgage fraud, which she has denied. It was the first time in the
Fed's 112-year history that a president has sought to remove a
governor.
Many legal experts consider the firing a threat to the Fed's
independence, as Trump has openly discussed securing a majority on
the Fed's governing board. Cook sued to keep her job and a court
ruled she could remain on the Fed's board while her lawsuit is
resolved.
An appeals court upheld that decision late Monday, enabling Cook to
vote in favor of a rate cut Wednesday. Also late Monday, the Senate
voted along party lines to confirm Miran as a Fed governor. He was
sworn in Tuesday morning.
Previous presidents have appointed their economic advisers to the
Fed. Former chair Ben Bernanke was an adviser in the Bush
administration before being appointed chair of the Fed. But Miran's
case is unusual because he is keeping his position at the White
House, while taking unpaid leave.
Powell has always sought to avoid a direct confrontation with Trump
and avoided commenting on Cook's case during a news conference
Wednesday, and he didn't say anything directly about Miran's status.
“We’re strongly committed to maintaining our independence and beyond
that I really don’t have anything to share,” Powell said when asked
about Miran.
Powell also repeatedly noted that with inflation still above the
Fed's 2% target, while unemployment has also risen, it's not clear
what steps the Fed should take next. If it cuts its rate too much,
it could overstimulate the economy and accelerate inflation. If it
keeps its rate too high, an ongoing hiring slowdown could get worse.
“It’s challenging to know what to do,” Powell said. "There are no
risk-free paths now.”
Nevertheless, “we came together at the meeting and acted with a high
degree of unity," he added.
Claudia Sahm, a former Fed economist and now chief economist at New
Century Advisors, said Fed policymakers likely acted out of support
for the Fed as an institution.
“The institution is under attack,” she said. “This was not the time
for three dissents.”
___
AP Business Writers Paul Wiseman and Alex Veiga contributed to this
report. Veiga contributed from Los Angeles.
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