Home Economy News Cleveland Fed taps former Goldman executive Hammack for president’s job

Cleveland Fed taps former Goldman executive Hammack for president’s job


By Michael S. Derby

NEW YORK (Reuters) – Former high-ranking Goldman Sachs executive Beth Hammack will become the next president of the Cleveland Federal Reserve, the regional bank said on Wednesday.

Hammack, 52, was until earlier this year co-head of global financing at the investment bank, where she also served on its management committee. She will take up her new role on Aug. 21, replacing Loretta Mester, who is leaving at the end of June due to central bank retirement rules.

The incoming Cleveland Fed president has extensive experience in markets and in how they interface with government activity. The regional Fed bank noted that Hammack had served as chair of the Treasury Borrowing Advisory Committee among other activities.

Hammack “has a deep understanding of financial markets and the monetary policy transmission process, expertise in leading complex business lines, and a proven commitment to mission-focused work,” Heidi Gartland, a member of the Cleveland Fed’s board of directors who served as chair of the regional bank’s presidential search committee, said in a statement.

The Cleveland Fed holds a vote on the U.S. central bank’s rate-setting Federal Open Market Committee this year, and the regional bank noted that Hammack will be a voter as soon as she takes office. According to the Fed’s most recent annual report, the Cleveland Fed’s bank president was paid $454,600 in 2022.

Hammack joins the Cleveland Fed as the central bank faces a policy choice in its effort to bring high inflation to heel.

The Fed hiked interest rates aggressively between the spring of 2022 and last July in an attempt to bring inflation back down to its 2% target. Easing price pressures last year opened the door to the prospect of rate cuts this year, but sturdier-than-expected inflation data in the first months of 2024 pushed back the timing of any easing, with markets now eyeing a cut sometime in the fall.

Mester’s retirement capped a long career within the central bank. She led the Cleveland Fed for the last decade and had previously served as research director at the Philadelphia Fed, which she joined in 1985.

Mester’s tenure at the Cleveland Fed was defined by her often-hawkish monetary policy outlook. Mester will attend the Fed’s June 11-12 policy meeting.

Regional Fed bank presidents lead quasi-private institutions that are technically owned by member banks, operating under the oversight of the Fed’s Board of Governors in Washington. Each of the 12 regional banks is overseen by boards of directors drawn from their respective communities. Board members who do not work for financial firms regulated by the Fed manage the process to find new leadership, subject to the approval of the central bank.

The regional Fed bank presidents help set monetary policy and collect local economic information. Their banks also house financial regulators and provide a range of services to local banks.


Hammack comes to the Fed as the landscape to serve has changed. Following revelations in 2021 that some central bank officials had traded in markets extensively while helping set monetary policy, the Fed has sharply tightened rules governing how policymakers and top staff can invest.

As part of the search to replace Mester, those involved in the process acknowledged the new rules might create challenges for some candidates, while noting that restrictions could also focus candidates on the public mission of the regional Fed bank.

Hammack is not the only former Goldman executive to helm a Fed regional bank. Between 2015 and 2021, Robert Kaplan, who rose to the top ranks of the investment bank, led the Dallas Fed before retiring amid questions about his personal trading activity.

An investigation by the U.S. central back’s internal watchdog said Kaplan and former Boston Fed President Eric Rosengren had not broken the law but created the appearance of a conflict in interest in how they invested and reported their financial activity from 2019 to 2021.

Kaplan is returning to Goldman to be its vice chairman.

Hammack will join the Cleveland Fed amid a push by some regional Fed banks to bolster the market experience of their leadership teams. The Dallas Fed is now helmed by Lorie Logan, who once led monetary policy implementation at the New York Fed, while the St. Louis Fed saw Alberto Musalem, who worked at several investment funds as well as at the New York Fed, take over as its president in April.

Hammack is “an especially great pick for this particular moment for the Fed,” said Steven Kelly, associate director of research at the Yale School of Management. He pointed to the Fed’s ongoing effort to shrink the size of its balance sheet and avoid market volatility as an area of importance, saying “it can’t hurt that the FOMC is beefing up its monetary policy plumbing bench.”

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