Is the Fed about to tear itself apart? The interest rate vote may split 7-5, causing market pricing to fall into chaos.

Question

[Block Rhythm] The Fed may be in for a showdown over interest rates. December 2nd is a rather delicate node, and it now seems that no matter how they ultimately vote, a large number of opposing votes is almost a foregone conclusion.

Here are the data: Among the 12 voting members, 5 have clearly stated that they do not want to lower the interest rate any further or are skeptical about it, while 3 members support lowering the interest rate. What does this mean? If there is indeed a 7 to 5 voting result, the entire interest rate market will need to be reshuffled.

The fixed income investment manager over at Threadneedle directly stated: “If it really becomes 7:5, those traders trying to price the interest rate path for the next 12 to 18 months will go crazy. Risk assets over there want certainty from the Fed? Dream on, it will be a complete mess by then.”

In plain terms, the Fed was previously criticized for pursuing superficial harmony, and now it seems determined to put internal conflicts directly on the table. For the market, this kind of uncertainty may be more troublesome than simply raising or lowering interest rates.

ApyWhisperer · Accepted Answer

With a 7:5 ratio like this, traders are probably going to flip the table collectively—the yield curve is going to blow up.

Wait, isn’t this basically the Fed finally giving up the pretense of unanimity? Honestly, it should’ve been like this a long time ago.

If there really is a split, how much impact will it have on the on-chain ecosystem? Feels like stablecoins will all need to be repriced.

TokenomicsTherapist · Answer

7:5 split? Who knows what kind of turmoil traders will go through these days, really can’t understand what kind of tricks the Fed is playing.

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Wait, does this mean the Fed is about to have an internal conflict? What should I do about my Position...

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Laughing to death, before they pretended to be all friendly, now they are directly tearing each other apart, after all, it’s all for their own interests.

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It seems certainty is completely gone, this is the real uncertainty premium.

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If the 7:5 vote really happens, how many people will die of heart attacks in the trading room... It feels like there will be a big market next month.

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This group of people in the Fed is finally going to show their cards, hiding for so long, the contradictions have been pent up for too long.

TradFiRefugee · Answer

The 7:5 split is really going to blow up, traders are going to eat dirt.

Is the Fed about to start infighting? Will the market be completely bewildered?

It feels like there&#39;s no certainty left, who still dares to catch a falling knife? Insane.

Powell can&#39;t control the situation this time, right?

Whether to cut or not, it’s equally painful; anyway, someone is going to be unhappy.

MetaNomad · Answer

The 7:5 voting ratio here is indeed a bit stretched; how many black swans must the traders endure?

UncommonNPC · Answer

7:5 split, now there&#39;s a good show to watch, traders are probably going to suffer this time.

If the Fed really goes berserk, the market pricing system will completely collapse.

This is true policy-making, no more pretending to be harmonious.

MultiSigFailMaster · Answer

7:5 split? Powell is going to have a headache now, the market is already anxious enough.

The Fed is really trying to break apart the "consistency" persona. Traders are going to have a tough time next year.

To be honest, I&#39;m curious to see if it will really turn out like this on December 2nd, the volatility is likely to skyrocket by then.

Anyway, nothing is certain right now, so I might as well reduce position and wait to see the show.