It’s no secret that Cleveland Fed President Beth Hammack has earned a spot as perhaps the most hawkish member of the US Federal Reserve since her appointment in 2024, after a career at Goldman Sachs.
Next year, however, he will take a more prominent position to promote those views. The Federal Open Market Committee (FOMC) of the Federal Reserve sets interest rate policy. Among its twelve voting members are four of the Federal Reserve’s eleven district presidents, who serve rotating one-year terms. In 2026, Cleveland Fed chief Hammack will join that group of voters.
“My base case is that we can stay here [with rates] for some period of time, until we have clearer evidence that either inflation is coming back on target or the employment side is weakening more materially,” Hammack told the WSJ over the weekend.
“I take it with a grain of salt,” Hammack said of last week’s November consumer prices report, which showed a surprising drop in the headline inflation rate to 2.7% from 3.1%, with a similar drop for the base rate.
Hammack blamed data distortions due to last fall’s government shutdown, and his own calculation puts the rate closer to the 2.9% or 3.0% that economists had previously forecast.
All things being equal, looser central bank monetary policy is supposed to be good for risky assets like stocks, commodities, and bitcoin. . While that has surely been the case this year for stocks and commodities like gold and silver (all of which are at or near all-time highs), bitcoin has struggled, starting a slide from its own all-time high shortly after the Federal Reserve’s first rate cut in September.
A big break with Waller
Among the finalists to be chosen by President Trump as the next chairman of the Federal Reserve is current Federal Reserve Governor Chris Waller.
Waller said three days ago that he considers the current 3.5%-3.75% level of the federal funds rate range to be between 50 and 100 basis points above the neutral level, meaning the Fed’s policy remains quite restrictive.
Hammack, however, told the WSJ that the federal funds range today is “a little bit below” the neutral rate, meaning he believes current policy is at least somewhat stimulative.
This is a hugely wide delta between two of the top policymakers in 2026. Wherever rates go in 2026, there are bound to be disagreements in what is typically a unanimous or near-unanimous vote. Whoever ends up chairing the Federal Reserve could have trouble getting the seven votes needed at each meeting to set policy.
