The Federal Reserve (Fed) is widely expected to lower interest rates this month, but the extent of support for a rate cut at this meeting and the subsequent rate path remain uncertain, according to the Wall Street Journal (WSJ). Fed Governor Lisa Cook, dismissed by President Donald Trump over allegations of mortgage fraud, has filed a lawsuit challenging the decision.

Although the U.S. District Court for the District of Columbia held a hearing on August 29, it remains unclear whether Cook will be able to participate in the upcoming Federal Open Market Committee (FOMC) meeting scheduled for September 16–17. The FOMC, which determines monetary policy, consists of 12 members: seven Fed governors appointed by the president and five regional Federal Reserve Bank presidents.

If the Senate confirmation process for Stephen Myron, Trump’s nominee to replace former Fed Governor Adriana Kugler (who resigned six months before the end of her term), proceeds swiftly, he could participate in this month’s FOMC meeting. Even if the court rules that Cook’s dismissal is justified, it is unlikely that the confirmation process for a replacement nominee will be completed in time for this month’s meeting. Consequently, with Cook’s participation uncertain, the six Fed governors expected to attend this month’s meeting are split evenly: three appointed by former President Joe Biden and three by President Trump.

Michelle Bowman, Fed Vice Chair, and Christopher Waller, both appointed during Trump’s first term, along with Myron, are anticipated to support a rate cut at this month’s meeting. Both Bowman and Waller had previously advocated for a rate cut in July. Fed Chair Jerome Powell stated during the Jackson Hole Symposium on August 22, “Given that policy is in a restrictive domain, the balance of our baseline outlook and evolving risks may necessitate adjusting our policy stance.”

This was interpreted as leaving the door open for a rate cut at the September meeting. According to the CME FedWatch Tool, Fed funds futures reflect an 87.4% probability of a 25 basis point (bp, where 1 bp = 0.01%) rate cut this month, with a 12.6% chance of rates remaining unchanged. Matthew Luchini, chief U.S. economist at Deutsche Bank, remarked, “It wouldn’t be surprising to see dissenting votes fairly regularly at future (FOMC) meetings.”

The WSJ suggested that public dissent in voting could confuse investors about who will lead the rate path in the coming months. Since Powell assumed the chairmanship, Fed governors have voted on policy 661 times, with dissent occurring only 18 times. Krishna Guha, vice chairman at Evercore ISI, observed, “Powell will likely try to shield the Fed from pressure and controversy in the upcoming meetings as much as possible.” The WSJ also noted that the competition among potential successors to Powell, whose term ends in May next year, to urge rate cuts in the media is amplifying this uncertainty.