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Division at the Federal Reserve has intensified in recent weeks, with officials staking out disparate positions ahead of the central bank’s December policy meeting — all while Chair Jerome Powell stays silent. The drama was amped up on Friday when New York Fed President John Williams, sometimes seen as a proxy for the Fed chief, signalled his support for a rate cut after several other policymakers came out leaning against one.Powell himself hasn’t spoken publicly since the central bank’s last rate decision on October 29. But a tally of recent remarks suggests the other voting members of the rate-setting Federal Open Market Committee are now nearly evenly split over what to do, all but ensuring some will vote against the December 10 decision regardless of the outcome.Once a rarity under Powell, dissents have increased this year. As officials wrestled with competing objectives of supporting a flagging labour market and keeping inflation in check, there hasn’t been a unanimous vote since June. The government shutdown, which delayed several key economic data releases, further complicated their ability to agree on which goal to prioritise. “By Powell not being out there right now, he’s letting every single member of the Open Market Committee have a voice and be listened to,” said Claudia Sahm, chief economist at New Century Advisors and a former Fed economist. “He’s giving them space to have this disagreement, and that’s actually a good thing because this is tough and you should have these debates.” The recent back-and-forth has scrambled market bets on the next rate move, as traders attuned to the Fed’s consensus view are now counting votes among individual policymakers.Heading into the October policy meeting, investors saw a December rate cut as a sure thing. Odds plunged following the outburst of hawkish sentiment, briefly falling below 30%, according to pricing in federal funds futures. But they rebounded above 60% after Williams’ remarks on Friday. The central bank has long prided itself on making rate decisions by consensus, and it’s been a hallmark of Powell’s tenure at the helm, which began in 2018 and is set to conclude in May.The resulting low number of dissenting votes at the Fed’s eight annual policy meetings telegraphs confidence in their decisions, and some research suggests it ensures clear and effective communication of the committee’s intentions. But critics argue it also leads to “group-think” that suppresses potentially important arguments. “On the group-think thing, people who are accusing us of this, get ready. You might see the least group-think you’ve seen from the FOMC in a long time,” Fed Governor Christopher Waller said Monday.Waller dissented from the Fed’s decision to hold rates steady in July along with his colleague Michelle Bowman — the first time two Fed governors had voted against the chair in 32 years. At the following meeting in mid-September, Governor Stephen Miran — who joined the Fed board that month after being nominated by President Donald Trump — voted against his colleagues’ decision to lower rates by a quarter point, instead favouring a bigger rate reduction. At the Fed’s October 28-29 meeting, Miran dissented again for the same reason, while Kansas City Fed President Jeff Schmid dissented in the opposite direction.Schmid wanted to hold rates steady, arguing that further cuts could reignite inflation. That’s a sentiment that’s been expressed by more and more Fed policymakers in the weeks since. Five of the 12 officials who vote on policy this year have indicated they’re leaning toward keeping rates on hold next month. “We need to be careful and cautious now about monetary policy,” Fed Governor Michael Barr, who in the past has leaned toward providing support for the labour market, said this week.Other past doves have also indicated they might be more comfortable holding rates steady next month. They include Chicago Fed President Austan Goolsbee, who hasn’t dissented in his nearly three years at the Fed, but said he would if he felt like he needed to. “If I end up feeling strongly one way, and it’s different from what everybody else thinks, then that’s what it is. That’s fine.I think that’s healthy,” Goolsbee said Thursday in a call with reporters. “I don’t think there’s anything wrong with dissenting.” He acknowledged there have been more dissents this year than in recent Fed history, but also called that healthy. It’s not unprecedented in the longer arc of the central bank’s existence.Dissents abounded in the 1980s, when the Fed lifted rates to punishingly high levels in order to bring down high inflation, and in the 1990s when lingering anxiety about price pressures had many policymakers concerned about easing too much. “Uncertainty is a pervasive feature of the macro economy and monetary policymaking,” Dallas Fed President Lorie Logan said Friday. “A policymaker cannot know with certitude the current state of every relevant aspect of the economy, let alone exactly how every part of the economy works or what shocks may arrive.Yet policymakers must still make policy decisions.” The December decision is shaping up to be the closest call in years. Some, like Deutsche Bank Senior Economist Brett Ryan, believe Williams locked in a cut with his Friday remarks. Others aren’t so sure. “I really think it’s still a coin flip,” said Sahm.

Former Federal Reserve Governor Adriana Kugler abruptly resigned after Chair Jerome Powell refused to grant her a waiver to address financial holdings that ran afoul of the central bank’s ethics rules, according to a Fed official.Kugler also faced a probe by the Fed’s internal watchdog related to her recent financial disclosures before stepping down in August, according to a document released Saturday.Fed ethics officials declined to certify Kugler’s latest disclosures, which were posted on the website of the Office of Government Ethics, and referred the matter to the board’s inspector general, the document showed. The OGE also declined to certify Kugler’s newly released disclosures.The disclosures revealed details related to financial activity that violated the Fed’s internal ethics rules.Kugler announced on August 1 that she would resign effective August 8, without citing a reason and after she missed the central bank’s July 29-30 policy meeting. At the time, the Fed said her absence from the meeting was due to a “personal matter.”Ahead of that meeting, Kugler sought permission to conduct financial transactions to address what the Fed official described as impermissible financial holdings. It wasn’t immediately clear which holdings were involved in that request.According to the official, Kugler asked for a waiver to rules requiring top Fed officials to obtain clearance before conducting certain financial transactions and prohibiting them from trading during so-called blackout periods which straddle their policy meetings. Powell denied the request.The newly released documents revealed previously undisclosed trading in individual stocks in 2024, which is prohibited for Fed officials and their immediate family members, including Materialise NV, Southwest Airlines, Cava Group, Apple and Caterpillar.Some of the prohibited trades also represented violations for having been executed during blackout periods straddling each policy meeting during which no transactions are allowed.That included the purchase of Cava shares on March 13, 2024, days ahead of a March 19-20 meeting and the sale of Southwest shares on April 29, 2024, on the eve of the Fed’s April 30-May 1 gathering. The disclosure also lists several fund transactions that fell within blackout periods.A footnote connected to the January 2, 2024 sale of Materialise NV shares read: “Consistent with her September 15, 2024, disclosure, certain trading activity was carried out by Dr Kugler’s spouse, without Dr Kugler’s knowledge and she affirms that her spouse did not intend to violate any rules or policies.”Kugler, who was appointed to the Fed in September 2023 by President Joe Biden, declined to comment.In the financial disclosure released Saturday, Fed ethics official Sean Croston said, “Consistent with our standard practices and policies, matters related to this disclosure were referred earlier this year by the Board’s Ethics Office to the independent Office of Inspector General for the Board of Governors of the Federal Reserve System.”The financial disclosure, which was submitted roughly a month after Kugler’s departure, covered calendar years 2024 and 2025 through her resignation. Top Fed officials are required to submit disclosures annually and after leaving the central bank, and to report periodic financial transactions.In periodic financial disclosures during 2024, Kugler acknowledged that she had run afoul of Fed investment and trading rules when her spouse completed four purchases of shares of Apple and Cava Group Inc.Those trades violated the central bank’s rules that limit how senior Fed officials, their spouses and minor children invest and trade.Kugler said her spouse made the purchases without her knowledge. The shares were later divested and Kugler was deemed in compliance with applicable laws and regulations by the Fed’s designated ethics official, according to the disclosures.Kugler’s resignation gave President Donald Trump an earlier-than-expected opportunity to fill a slot on the Fed’s board in the midst of his intense pressure campaign urging policymakers to drastically lower interest rates. The opening ultimately went to Trump ally Stephen Miran, who took an unpaid leave of absence from his post as a White House economic adviser and has called repeatedly for rapid rate cuts.Powell introduced tougher restrictions on investing and trading for policymakers and senior staff at the central bank in 2022. That followed revelations of unusual trading activity during 2020 by several senior officials.Boston Fed President Eric Rosengren and Dallas Fed chief Robert Kaplan each announced their early retirement after the revelations, with Rosengren citing ill health. The Fed’s internal watchdog ultimately cleared the pair of legal wrongdoing, but chastised them for undermining public confidence in the central bank.The new rules, which the Fed said at the time were aimed at supporting the public’s confidence in the impartiality and integrity of policymakers, boosted financial disclosure requirements, among other measures.