The Fed has rarely split? If the third dove is present among the directors, how will the market interpret it

XM Foreign Exchange APP News-The Federal Reserve's interest rate resolution may have rare differences. Both Bowman and Waller tend to cut interest rates as soon as possible. If more directors join the dovish camp, the market's confidence in policy consistency may be impacted. Powell's wording in the press conference will be the focus, especially his statement on the stability of the labor market and the risks of tariff inflation. Despite the overall strong economic data and strong bond demand, the Fed is inclined to make a statement and maintain policy flexibility. There is a risk that the Federal Reserve's interest rate resolution will be passed in a partial vote. Bowman and Waller both joined the Federal Reserve during Trump's first administration appointment. The two recently expressed their tendency to lower interest rates in July. It is not uncommon for directors to raise objections, but it is not unusual for two directors to speak out together in the same meeting. The last time such a situation occurred was in 1993 more than thirty years ago. According to statistics, since the beginning of 2020, about 85% of the results of the FOMC meeting were unanimous votes; the last time two directors (including voting and non-voting members) raised objections in the same meeting was in 1993. If similar structural differences occur this time, it will become an important signal in the financial market structure. Analysts believe that Waller, as one of the potential candidates for future Fed Chairman, will undoubtedly contribute to his political affinity if his dove position is close to the president's attitude. For traders, the real focus will be on Powell's press conference: the market has judged by analysts, and Powell is very likely to re-emphasize that the current position of the Federal Reserve is quite subtle: on the one hand, the intensified trade uncertainty brings growth risks, which seems to prompt policy easing;On the other hand, the latest economic data shows that it is still strong, and the inflationary effect caused by tariffs has not yet been fully revealed. Therefore, analysts believe that policy makers have not yet met the sufficient conditions to initiate interest rate cuts or clearly release a signal of interest rate cuts; adopting a cautious "observation and waiting" attitude, it can also retain the option of September interest rate cuts without making any ngjpn.cnmitments in advance, which is in line with the current situation. At the same time, consumer confidence has shown signs of recovery, which is more supportive of US dollar sentiment. The key to the voting cracks and the impact of market sentiment really determines the direction of the market will be the internal team situation of FOMC. At present, the market generally expects at least two directors to support an immediate rate cut; if three or more objections appear, it may instead undermine the market's confidence in policy consensus; although the stock market may prefer dovish signals, there are still concerns about the phenomenon of inconsistency within the Fed. The cracks in the director's structure themselves may trigger unstable expectations; some analysts believe that although trade risks may ease in the short term, the real uncertainty has not been lifted. Most of the so-called "trade agreements" are not legally bound, and the president can still adjust terms or tax rates, which means that potential policy changes may occur at any time; the short-term market recovery sentiment may increase the risk premium of the US dollar, but the structural risks have not disappeared. Bond market performance and US dollar credit confidence The strong performance of US Treasury bond auctions has become an important factor in the long run of the US dollar. According to Reuters, the bidding for two-year Treasury bonds is "very enthusiastic", with about 90% of buyers being non-dealers, that is, the participation rate of institutions and retail traders is extremely high; 89% of the bidding for 20-year reissued bonds is also undertaken by non-dealers; bonds for this maturity are usually not very concerned, but they still show strong demand; this strong demand highlights the relative risk aversion, supports US dollar demand, and also keeps the bond yield structure and risk appetite stable, helping the Fed maintain a policy wait-and-see state. Although the current rebound background of the dollar is called by Reuters the decline of the "tariff risk premium", analysts believe that this is just a loose market appearance and the real uncertainty has not been lifted. Trade frictions seem to ease, but the risks are still there, and the market's "relaxed" expectations drive the dollar to rebound. Analysts judge that this may be a sustained, structural rebound rather than a temporary repair; the most important focus of this Fed meeting is not whether to cut interest rates immediately, but whether there are cracks in the internal voting structure: especially if there are third or more directors in addition to Bowman and Waller, the market's confidence in policy consistency will be impacted. The wording of Powell's press conference will determine the market's judgment on speed and slow expectations and the trend of the US dollar. In light of the current economic data, tariff inflation has not yet been implemented, and demand in the bond market is still strong, the Fed still tends to "retain options and not rush to make decisions." Traders are concerned about three important factors: the results of the meeting vote (especially the number of directors objections), the wording of Powell's press conference (especially about the labor market, inflation and the wording of the "summer learning period"), and the upcoming employment data to determine whether the Fed will start in a new round of policy easing cycle and whether the medium-term trend of the US dollar will be reshaped as a result.

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