The Federal Reserve has decided to keep interest rates unchanged again, but this time, discord broke out from within. You could even say it’s at the most serious level since 1992.

Early last Thursday at 2:00 a.m. Beijing time, the Federal Open Market Committee made its interest rate decision. As expected, it chose to keep the target range for the federal funds rate between 3.5% and 3.75%. That means it has gone three meetings in a row without changing rates. Immediately after the announcement, major U.S. stock indexes dipped slightly, spot gold fell modestly, and the U.S. dollar index rose by 10 points.

What stands out here is the voting result. The members voted 8 to 4 in favor. The four who opposed it is the first time since October 1992. Commissioner Milan wanted a 25bp cut, while Commissioners Hamak, Kashkari, and Logan agreed to keep rates unchanged, but opposed including a more accommodative tone in the statement. For such a split of views to arise within the Federal Reserve is a signal of just how complex the policy direction is.

So why did this happen? It seems arguments emerged that the Fed should be cautious about rate cuts, as an energy shock has surfaced new inflation risks. The phrase “additional adjustments” in the statement is also interpreted as hinting at the possibility of rate cuts, which points to the policy challenges the next chair will face. The Federal Reserve previously expected to cut rates once in March this year and again in 2027, which would mean the federal funds rate would fall to a neutral level of about 3.1%.

In the end, the era of rate hikes appears to be over, but the road ahead remains uncertain.