Last week, the probability of a Fed rate cut at the December 10th meeting went from 70% on Monday to 42% on Friday. However: - There were no major government data releases, as the Government was still closed until Wednesday - The Federal Reserve chairman did not speak this past week. So what drove this shift in the outlook for policy? Here's an explanation by Jim Bianco: * 4 Fed voters are arguing for another rate cut (with Miran arguing for at least a 50 bps cut). * 5 voters are arguing for holding rates steady * 3 voters are either neutral or unclear (so far) on how they will vote. This includes Chair Powell. For 40 years, Fed policy was effectively set by one person, the chair. The monetary policy vote was typically 12-0 or 11-1. The Fed justified this unified front by saying it reduced market uncertainty, thereby making it more effective. Now this is changing, and so is the market’s view of the Fed. With higher-than-normal uncertainty, the market is pricing a 50/50 chance of a cut. Normally, these odds are much closer to 0% or 100% when a meeting is less than a month away. What Changed? We would argue Trump’s constant bashing of the Fed/Powell and Fed Governor Miran’s vocal arguments for a 50 bps cut appear to be breaking the 40-year stranglehold the Fed chair has had over committee voting. No longer are the 12 FOMC voters going to fall in line with the chair’s desires. They are quickly considering themselves truly independent voters and will vote as they see fit. Maybe Fed Governor Stephen Miran is leading the way. If he can ignore the Fed groupthink and act completely independently, publish blog posts explaining his rationale, and do numerous interviews to explain his opinion, then why can’t everyone else? The result is 12 truly independent voters. This is how every other major central bank and the Supreme Court operate. If this is truly happening, it marks the end of the Fed’s unanimous voting.