Internal Fed tensions
Powell also faces growing dissent within the Fed itself. Christopher Waller and Michelle Bowman, two Fed governors, voted for rate cuts at July’s meeting. With Trump’s nominee Stephen Miran potentially joining the board, Powell could face three dissenters among the seven-member board—a level of opposition not seen since 1988.
Miran, who has endorsed Trump’s calls for rate cuts and proposed giving presidents power to dismiss Fed chairs at will, represents what analysts call an “agent provocateur” within the traditionally staid central bank.
“Miran is not somebody who’s going to be enveloped in and overwhelmed by the traditions inside the Fed,” said Steven Blitz, chief US economist at TS Lombard.
Economic crosscurrents
Powell must navigate conflicting economic signals. While unemployment remains relatively low at 4.2%, a sharp slowdown in hiring has raised concerns about labor market health. Meanwhile, Trump’s tariffs have created what one economist called “a stagflationary impulse” that complicates monetary policy decisions.
The Fed chair’s Jackson Hole speech traditionally serves as a platform for signaling major policy changes. In 2024, Powell used the summit to confirm the Fed’s intention to begin cutting rates after holding them high to combat post-pandemic inflation.