The Federal Reserve's July policy meeting may see increased disagreements, but market experts say investors do not need to react.

The July policy meeting of the Federal Reserve, which is scheduled to end on Wednesday, may see a rare occurrence where two board members express their opposition to the decision to maintain the interest rates. This would be the first time since 1993 that two permanent voting members of the Federal Open Market Committee (FOMC) have dissented simultaneously. However, market experts warn that even if this happens, investors do not need to react too strongly. Despite significant pressure from US President Trump and his allies on Federal Reserve Chairman Powell to cut interest rates quickly, it is widely expected that this meeting will still keep rates unchanged. However, some analysts suggest that current Fed governors, Waller and Bowman, may vote against staying put and instead support a rate cut. According to reports from foreign media, if this scenario were to occur, it would be the first time in over five years that more than one member dissents on an interest rate decision, and the first time in over 30 years that two permanent voters have simultaneously opposed. Normally, such dissent would signal a dovish stance from the Fed, indicating a possible rate cut at the next meeting. However, Tom Essaye, editor of Sevens Report Research, stated in a report on Tuesday: "These are not normal times." He mentioned that if Waller or Bowman vote against, the market may not pay much attention, as both governors are considered potential successors to Powell. Powell's term as chairman ends in May next year, and the support for a rate cut by Waller and Bowman at this time could easily be seen as a "political move" to please the president rather than a judgment based on economic data. "The true motivation behind their dissenting vote is actually not that important," Essaye pointed out. "What is important is how the market interprets this behavior." He also emphasized: "If some media reports suggest that these dissents represent a shift towards dovishness at the Fed, or an increased likelihood of a rate cut in September, then it should not be taken seriously; it is not surprising and will not change market expectations." In fact, since Powell took office, the Federal Reserve has maintained a high degree of unity. According to Steve Donze, a strategist at Pictet Asset Management Company's Japan division, in an article on the X platform, FOMC under Powell's leadership has historically been the least divided. Despite a strong rebound in US stocks this summer, there was a slight pullback on Tuesday, with the S&P 500 ending a streak of six consecutive all-time highs by dipping by 0.30%; the Dow Jones fell by 0.46%, still close to the historical high set in December last year. Meanwhile, as investors prepare for this week's Federal Reserve meeting and the July nonfarm payrolls report to be released on Friday, US bond yields saw a significant drop on Tuesday. The 10-year Treasury yield fell by 8.9 basis points to 2.429%. Regardless of whether actual dissents occur at this meeting, the debate between the "doves" and "hawks" within the Federal Reserve will intensify. Strategists Thierry Wizman and Gareth Berry from Macquarie Bank stated: "We have repeatedly emphasized that the doves do have a point about certain signs of weakness in the US economy, which is why they may dissent." They also believe that the possibility of a rate cut at the September meeting still exists, and the possibility of a rate cut in December should not be ignored. According to the CME FedWatch tool, data currently incorporated in the Federal Funds Rate futures market shows that the market expects a rate cut in September by over 60%, and at least two rate cuts by December are estimated to have a probability of around 65%.