Fed's Hammack (2026 voter, Hawk) says she tries not to focus too much on markets beyond economic implications, via CNBC

Policy

• When asked about Powell signalling for a September rate cut, says she heard that Powell was open minded about the policy outlook.


• Need to maintain modestly restrictive stance to get inflation back to target.


• Only a small distance away to the neutral rate. 


• Fed needs to be cautious about any move to cut rates. 


• Policy is only modestly restrictive.


• Reiterates her neutral rate estimate is towards the higher end of estimates.

Inflation/Employment

• Expects inflation and unemployment to rise.


• Tries not to take too much from one report, when asked about the July jobs report and revisions.


• Squarely focused on inflation side at the moment, but there is a lot of data between now and September. Fed is still badly missing on inflation mandate.


• She would like to be in a place where she sees inflation coming back to target  (in response to a question whether she would like to see rates cut this year)


• Need to judge magnitude of misses on the mandate.


• Is open to anything when moving forward, a big weakening in Job market could drive Fed to cut rates, but she thinks inflation risks are greater than labour market risks at the moment.

Other

• Governor Cook is of high integrity.


• Leverage in Treasury Market bears watching.

Analysis details (16:43)

Hammack echoed her hawkish comments from the day prior, despite the dovish speech earlier from Fed Chair Powell. She is clearly more concerned about missing inflation goals than labour market goals, noting she tries not to take too much from one report when asked about the July report and revisions. When asked if she would like to see rate cuts later in the year, she said she would like to see inflation coming back to target, reiterated rates are only a small distance away to the neutral rate and the Fed needs to be cautious about any move to cut rates. 

22 Aug 2025 - 16:31- Fixed IncomeImportant- Source: CNBC