Gold ticks up but remains pressured by Fed rate caution, easing trade fears
Investing.com -- The Federal Reserve cut interest rates by a quarter of a percentage point on Wednesday, but the decision revealed significant division within the central bank’s leadership.
The Fed lowered its policy rate to a range of 3.75%-4.00% in a 10-2 vote that showed Chair Jerome Powell may be struggling to maintain consensus among policymakers.
JPMorgan Asset Management Head of Global Fixed Income Bob Michele said on Bloomberg TV that "Chair Jerome Powell is losing his grip on the Fed," referring to the dissents at Wednesday’s meeting.
The central bank also announced it would restart limited purchases of Treasury securities after signs emerged that liquidity was becoming scarce in money markets.
Two Fed officials voted against the majority decision. Stephen I. Miran preferred a more aggressive half-percentage point cut, while Jeffrey R. Schmid wanted no change to interest rates.
Michele noted that Miran "could have gone for 75 basis points" while Schmid "reemerges" in favor of keeping rates steady.
When asked about potential future leadership at the Fed, Michele suggested Treasury Secretary Scott Bessent could be a candidate, describing him as "persuasive."
"You have to put him into the Fed if you’re the administration and want to see rates at 3% and lower, and have him lobby and create the persuasion," Michele said about Bessent.
During today’s press conference, Powell said a rate cut in December was "far from" a foregone conclusion, further complicating the picture for rates.