By Michael S. Derby
NEW YORK (Reuters) – The Cleveland Federal Reserve announced on Wednesday that Beth Hammack, formerly a high-ranking executive at Goldman Sachs, will become the regional Fed bank’s new president, replacing Loretta Mester, who is set to retire at the end of June.
Hammack, 52, was until earlier this year co-head of global financing at Goldman, where she also served on the management committee.
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 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.
The Fed hiked 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 caps a long career within the central bank. She helmed the Cleveland Fed for the last decade and had previously served as research director at the Philadelphia Fed, which she joined in 1985.
Her tenure at the Cleveland Fed was defined by her often-hawkish monetary policy outlook. She has the highest rate of dissenting votes among current voting members of the FOMC, voting against her colleagues in favor of tighter monetary policy in 7% of her 41 votes, according to data from Wrightson ICAP Mester. 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.
(Reporting by Michael S. Derby; Editing by Paul Simao)
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