Miran and Cook are both approved to attend and vote, as the Federal Reserve's decision drama unfolds on Thursday, marking the first appearance of a "four-way battle"?

On the eve of the Federal Reserve's key interest rate decision this week, two personnel changes have added drama to the highly tense market.

According to CCTV reports, on September 15 local time, the U.S. Court of Appeals for the District of Columbia rejected an emergency application from the U.S. Department of Justice, upholding a lower court's temporary injunction preventing Trump from replacing Lisa Cook. This means Cook will be able to attend this week's Federal Reserve meeting.

Almost at the same time, according to CCTV News, the Senate narrowly approved the nomination of Stephen Miran to the Federal Reserve Board by a vote of 48 to 47. With the rapid push from the Republicans, Miran is expected to take office on Tuesday morning, possibly just in time for this week's Federal Reserve meeting.

The successful entry of a White House-backed candidate into the Federal Reserve Board, along with a current board member facing presidential dismissal pressure who retained voting rights through a court ruling, has brought a political struggle over central bank independence directly to the decision-making table of the Federal Open Market Committee (FOMC), adding further uncertainty to an already closely watched interest rate decision Although the market generally expects the Federal Reserve to cut interest rates by 25 basis points, the addition of two voting members with completely different positions has made the final outcome difficult to predict. Some analysts even believe that the FOMC may experience a rare "four-way battle," posing a significant challenge to market expectations.

Cook Approved to Stay, But Voting Position Remains a Mystery

Cook's retention adds the greatest uncertainty to this meeting. Last month, facing allegations of mortgage fraud related to misreporting her primary residence, Cook filed a lawsuit after Trump attempted to remove her.

This lawsuit has become the focal point of the increasingly tense relationship between the White House and the Federal Reserve.

Notably, some analysts point out that during the Biden administration, Cook was listed as one of the most dovish members of the Federal Reserve, favoring low interest rates.

Benjamin Picton, an analyst at Rabobank, believes that Trump's attempt to remove a dovish official may be aimed at proving that the Federal Reserve's monetary policy is not purely a "technocratic process," and its decisions can be influenced by White House appointees.

Another radical speculation suggests that this former "super dove" official may unexpectedly vote in favor of a rate hike to demonstrate her independence, especially if other officials vote in favor of a significant rate cut. If this scenario occurs, it would confirm external concerns about the Federal Reserve's independence being compromised.

Miran Quickly Takes Office, Strengthening the Rate Cut Camp

In contrast to Cook's turmoil, Miran's appointment was quite swift.

Against the backdrop of Trump continuously pressuring the central bank to cut rates, Republicans pushed for a quick Senate approval of this nomination. Miran's addition will almost certainly strengthen the dovish camp within the FOMC. Analysts believe he will not only vote in favor of a 25 basis point rate cut but may even vote alongside officials like Waller and Bowman for a 50 basis point cut.

Previously, Miran stated during the Senate hearing that he would join the Federal Reserve on an unpaid leave basis. This statement was met with severe questioning from Democratic lawmakers.

Massachusetts Senator Elizabeth Warren criticized that Miran's temporary leave from the White House to join the Federal Reserve poses a threat to the Fed's independence, stating that "every word and action will be scrutinized, and people will see him not as an honest intermediary but as Trump's puppet."

Will There Be a "Four-Way Battle" at This Week's Federal Reserve Meeting?

Before these changes occurred, the market widely expected Federal Reserve officials to cut rates by 25 basis points this week, while estimating the likelihood of a 50 basis point cut at about 10%.

Now, with Cook and Miran confirmed to participate in the vote, a "four-way split" voting scenario is being discussed in the market. This may include:

• The Significant Rate Cut Camp: Represented by Miran, Waller, and Bowman, the "super doves" may vote in favor of a 50 basis point cut

• Moderate Rate Cut Camp: The centrist camp led by Chairman Powell may vote in favor of the market's expected 25 basis point rate cut.

• Maintain Rate Unchanged Camp: Represented by officials like Goolsbee and Hammack, this camp may vote to keep rates unchanged.

• Unexpected Rate Hike "Wild Card": Cook may unexpectedly vote in favor of a 25 basis point rate hike to counter pressure from the White House.

If such an unprecedented "circus-like" outcome really occurs, the policy signals from the FOMC will be extremely confusing, and the immediate reactions from financial markets will be unpredictable, with all bets potentially becoming invalid in an instant