Is the Federal Reserve Chair's power being constrained? Kashkari emphasizes that the next chair only has one vote—what is the deeper meaning behind this?

Fed Kashkari’s recent remarks have sparked market attention: the next Federal Reserve Chair must present their most compelling arguments and only have one vote. This seemingly ordinary power mechanism actually reflects the deep challenges currently facing the Fed—pressure from political interference is on the rise.

The Fed’s Power Check-and-Balance Mechanism

Kashkari’s statement appears to be stating facts, but in reality, it emphasizes the democratic nature of Fed decision-making. According to the Fed’s operational rules:

• The Fed Chair controls the agenda and has a voice, but only has one vote in FOMC votes
• The FOMC is composed of 12 voting members, including Federal Reserve Board members and regional Fed Presidents
• Any policy decision requires a majority vote; no one can decide unilaterally
• This design aims to prevent excessive concentration of power

Kashkari emphasizes this point not as a recount of old news but as a preparation for an upcoming power transition.

Why emphasize this now?

Jerome Powell’s term ends in May 2026, and the selection of the next Fed Chair has become a focal point. According to reports, there is intense debate over potential candidates, and the political game between the Trump administration and the Fed is heating up.

Kashkari has expressed concerns about the Fed’s independence on multiple occasions. He explicitly states that if Fed decisions are subject to political interference, global markets could face risks. He also emphasizes that the credibility of the next Chair must be a top priority, implying doubts about the independence and professionalism of potential candidates.

Sticky inflation and policy divergence

The background also includes the current economic situation. Kashkari has repeatedly stated that inflation remains high and sticky, with current policy stance close to neutral rates. This means:

• Limited room for further rate cuts
• Possible disagreements within the Fed on policy direction
• The next Chair will face complex choices

In this context, emphasizing the limitations of the Chair’s power is essentially a reminder to the market: whoever becomes the next Fed Chair, they cannot single-handedly change the Fed’s policy direction.

Market implications and future outlook

This statement has several implications for the market:

First, it reinforces the uncertainty of Fed decision-making. After the new Chair takes office, there may be differing voices within the FOMC, and policy direction may not move as some expect.

Second, for the cryptocurrency market, Kashkari himself has taken a tough stance against cryptocurrencies. He has repeatedly stated that cryptocurrencies are “basically useless” for consumers and has praised SEC enforcement actions. If the Fed’s internal attitude toward financial regulation becomes more stringent, it could put pressure on cryptocurrencies.

Third, the emphasis on Fed independence itself is a signal—the market should expect that Fed policies will be based on economic data rather than political pressure. This could mean that rate cuts may be delayed longer than market expectations.

Summary

Kashkari’s emphasis that the next Fed Chair only has one vote essentially supports the Fed’s system of checks and balances. This is not about weakening the Chair’s power but about emphasizing the democratic decision-making process of the Fed. In the context of rising risks of political interference, this emphasis becomes especially important. For the market, it means paying more attention to the overall stance of the FOMC rather than hoping a single Chair will change policy direction. The Fed’s policy orientation will be more driven by economic data and the consensus of the majority of members.