Waller and Bowman: The New Trumpian Doves
For much of this year, the Federal Reserve has held interest rates steady after a series of cuts in late 2024. But that fragile consensus may be breaking.
On Monday, Fed Governor Michelle Bowman, one of the central bank’s most hawkish members in 2023 and 2024, said she could support cutting rates again as soon as the July 30 meeting—marking a dramatic shift from her prior stance. Her remarks, delivered in Prague, came just days after Governor Christopher Waller said he too could back a cut next month.
“I would support lowering the policy rate as soon as our next meeting,” Bowman said, provided inflation pressures remain subdued. She also pointed to the White House’s new bilateral tariff regime, noting that it has not yet resulted in higher consumer prices.
“Retailers seem unwilling to raise prices on essential consumer items,” she said.
This dovish turn is significant not just because of Bowman’s past resistance to cuts—she was the sole dissenting vote against the Fed’s 50 basis point rate cut last September, arguing for a smaller move—but because of what it now signals: the emergence of a pro-cut bloc inside the Fed’s Board of Governors.
And if the majority of the Federal Open Market Committee (FOMC) opts to hold again in July, as Chair Jerome Powell has suggested, it could trigger something not seen in decades: a dual dissent from sitting Fed governors.
A Historic Break?
Dissents at the Fed are not unusual; but almost all come from the regional Reserve Bank presidents, not the Board of Governors. In recent memory, two governors dissenting together is virtually unheard of. The Board, seated in Washington, has traditionally presented a unified front—especially under Powell’s chairmanship.
A joint dissent by Bowman and Waller would shatter that appearance of unity. And it would mark the first time in recent decades that two governors broke with the chair’s preferred policy stance—especially in favor of easing, rather than tightening.
That both are Trump appointees is no footnote. Waller and Bowman were nominated during the former president’s first term and have consistently emphasized supply-side views of inflation, greater concern for labor markets, and skepticism of groupthink inside the central bank. With Powell now resisting further cuts, they are openly signaling it’s time to move.
Powell on the Defensive
Chair Powell continues to signal what his admirers describe as “patience.”
“For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments,” he said last week. Other officials have echoed that cautious tone, particularly in light of their view that tariffs risk igniting inflation.
But that wait-and-see message may no longer reflect the full view of the Board.
Bowman and Waller now seem to believe that the risks of delaying action—particularly for the labor market—outweigh the risks of moving too soon. That view could gain steam if economic data softens further or if core inflation continues to drift downward.
And if the Fed holds rates in July while these two governors dissent, it would expose a growing internal rift. No longer a quiet disagreement—it would become a public challenge to Powell’s credibility and leadership.
The Trump Effect: Speak Your Mind
This would also mark the reemergence of the Trump policy legacy inside the Fed. While Powell was elevated to chair by Trump in 2017, he has repeatedly set the Fed on a path that was bound to clash with the Trump administration’s agenda on tax-cut fueled growth, immigration restriction, and economic nationalist trade policies. Bowman and Waller, by contrast, are now moving in the opposite direction—calling for cuts, even as Powell holds back.
As Breitbart News reported Monday, their alignment suggests a new internal coalition forming within the central bank, potentially shifting the balance of power ahead of future decisions.
The Next Chair Will Need to Be Audacious
There’s another layer to this moment that shouldn’t be overlooked: succession. Jerome Powell’s term as chair ends in the first half of 2026. That means Trump will get to nominate a new leader to head the Federal Reserve—someone willing to depart from the stale orthodoxy of the Fed staff, which has repeatedly underestimated both inflation and the effects of tariffs, while overestimating the fragility of the labor market.
That makes the July meeting more than just a policy test. It’s a leadership test.
If Bowman and Waller follow through with dissents, it won’t simply mark a break from Powell. It will serve as a preview of who is willing to challenge the “staff view” that has so often driven Powell’s decisions—even when it clashed with real-world conditions. The next Fed chair will need to be someone who can stand up to the models, question the assumptions, and prioritize results over reputation.
The coming weeks may reveal which Fed members are ready to lead—and which are still waiting for permission.
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