I'm not going anymore! Powell's final battle, the Federal Reserve is in chaos!

On the early morning of May 1st, the Federal Reserve's interest rate decision was finally announced, with the federal funds rate target range remaining locked at 3.5% to 3.75%, marking the third consecutive time maintaining the rate unchanged.
Compared to this unsurprising decision, the market is more concerned about Powell's departure and Waller's power transition, which was supposed to be a smooth handover but is now turning into an unprecedented internal struggle, breaking the Fed's 75-year tradition.
In Powell's last policy meeting before stepping down, he dropped a bombshell: after resigning as chair, he will continue to serve as a board member until early 2028, breaking the 75-year convention of chairs leaving immediately after stepping down.
This decision put Trump's nominated successor, Kevin Waller, in an awkward position, as he will face not an institution in a power vacuum but a dual-chair scenario, a "two kings" situation that has never occurred in Fed history.
Even more shocking was the voting result: out of 12 voters, 8 supported holding rates steady, 4 voted against, the highest opposition since 1992, setting a 34-year record.
The cracks have been widening over time—2 votes against in July 2025, 2 in October, 3 in December, and now 4—divisions have gradually expanded, finally erupting fully in Powell's final act.
Cleveland Fed President Loretta Mester, Minneapolis Fed President Kashkari, Dallas Fed President Logan lean toward rate cuts but added "dovish" language in their statements; Board member Milan directly advocated for rate cuts.
These four expressed their policy dissatisfaction through their votes.
These opposition votes are less about questioning the rate decision and more about an early warning to new Chair Waller.
Waller, appointed by Trump, was narrowly confirmed by the Senate Banking Committee with a 13:11 party-line vote, with Democrats voting unanimously against.
He faces internal division even before taking office, and Powell's remaining as a board member tilts the power balance further.
Trump's plan to control monetary policy through Waller may be doomed to fail.
The clash of policy philosophies fundamentally reflects disagreements over the future of the U.S. economy, and this discord is more destructive than simple rate hikes or cuts.
The Fed's credibility is wavering; as the world's most influential central bank, its internal fractures are directly triggering market panic.
Wall Street's expectations have fundamentally shifted—major institutions like JPMorgan have ruled out rate cuts in 2026 and now see 2027 as a possible year for hikes due to rising oil prices and inflation pressures.
Futures markets show a 40% chance of rate hikes before April 2027, which could surge to 80-90% if oil prices continue to rise.
Brent crude oil is approaching $110 per barrel, with tensions in the Middle East intensifying energy supply chain risks, reigniting inflation pressures, and shattering expectations of rate cuts.
All this is bad news for Trump—U.S. national debt has surpassed $39 trillion, accounting for 100.2% of GDP, a new high since 1946.
If the Fed shifts to rate hikes, it will significantly increase government debt interest payments, which could approach $1.3 trillion in fiscal 2026—more than double U.S. military spending.
On one side, ongoing war support is increasing; on the other, debt burdens are mounting.
The Trump administration faces a dual challenge of fiscal and monetary policy, and the Fed's internal division makes this challenge even tougher.
After taking office, Waller will face "dual challenges": balancing inflation and economic growth, and managing internal power struggles within the Fed.
He has expressed opposition to "forward guidance" style communication, advocating for flexible decision-making based on the latest data, which differs markedly from Powell's policy framework.
Powell remaining on the board means he will continue to have voting rights and influence, potentially opposing Waller's policies at any time.
This "dual-core" structure may become the norm for the Fed in the near future.
For ordinary investors, it is necessary to reduce risk appetite and avoid blindly chasing highs;
For businesses, strengthening exchange rate risk management and preparing for market volatility are essential.