✨ What Powell will say on Friday night has already been clearly expressed by Federal Reserve's Hammack. How close are they!
Today's speech by Hammack is to test the market and see what significant reactions occur, while also informing the market about what Powell will say in one of his meetings during his final term.
First, why do I say Hammack can represent Powell's speech? What is the relevance and connection between them?
1. Identity and Position
Federal Reserve's Hammack (Beth M. Hammack) is an important member of the U.S. Federal Reserve System.
Appointed President of the Cleveland Federal Reserve Bank in August 2024, succeeding former hawkish President Mester, she is the successor of the hawks.
Goldman Sachs background: Before joining the Federal Reserve, Hammack worked at Goldman Sachs for nearly 30 years, holding positions such as global financial chief and co-head of the financing department.
2. Party affiliation and policy stance
Hammack, as a technical official, has not publicly declared allegiance to any political party. Her policy positions are based on economic data analysis rather than political stance.
Core hawkish representative: Opposes hasty rate cuts: Advocates maintaining stable interest rates until inflation clearly falls back to the 2% target, emphasizing that 'we should not rush to act when data does not support a rate cut.'
Key voting record: At the December 2024 FOMC meeting, she cast the only dissenting vote against a 25 basis point rate cut, believing that a 'moderately restrictive' policy should be maintained to curb inflation.
3. Relationship with Powell
Policy coordination
Jointly defend independence: In response to repeated pressures from the Trump administration to cut rates (such as the financing cost pressure of $3.2 trillion debt maturing in 2025), both Hammack and Powell emphasize 'policy independence first,' rejecting political interference.
Consistent wait-and-see strategy: Against the backdrop of tariff policies causing stagflation risks in 2025, both advocate 'holding steady,' needing more data to assess the impact of trade policies on inflation and employment.
Public mutual trust statements
Hammack has repeatedly publicly expressed her respect for Powell, calling him 'a person of high character,' and supports his decisions in FOMC meetings. Powell also recognizes Hammack's professionalism in financial market risk management.。
4. Current Policy Role (August 2025)
As a core hawk among the 2025 FOMC voters, Hammack insists:
Opposes September rate cuts: Believes inflation is still above target (core PCE year-on-year at 2.6%), and the labor market has not significantly deteriorated (unemployment rate at 4.2%), requiring clearer data support for a rate cut.
Beware of the tariff transmission effect: Emphasizes that Trump's tariff policy may trigger a 'second inflation pulse,' requiring cautious observation of the impact of corporate restocking behavior on prices.
The only thing that could intervene with Powell tomorrow is that Trump will pressure Powell. Facing personnel changes (such as Trump's nomination of dovish governor Milan), he may be forced to compromise and choose to continue playing it cool.
Hammack's hawkish remarks have already pushed up U.S. Treasury yields (2-year rate exceeding 3.8%).
If Powell signals a rate cut tomorrow at Jackson Hole, it could trigger a decline in U.S. Treasury yields and a rebound in risk assets;
If the market echoes Hammack's position, it may see a repeat of the 2022 'double whammy' on stocks and bonds.
