Beth Hammack, a former partner and management committee member at Goldman Sachs, has been appointed as the new president of the Cleveland Fed, sparking jokes about “Government Sachs.” However, many believe this to be a strong appointment, with Hammack’s impressive background in finance and experience at one of the world’s leading investment banks.
The move also highlights a shift in the composition of the Federal Reserve system, with Hammack replacing Loretta Mester, who holds a PhD in economics from Princeton. This trend is evident when comparing the current Fed board and regional Fed heads to those from a decade ago, where a higher percentage held economics doctorates.
Hammack’s extensive experience in financial markets, including serving as global head of repo trading and treasurer at Goldman Sachs, sets her apart from previous Fed governors and presidents. Her background in interest rates trading and macro trading, as well as her role in advising the US government on borrowing plans, make her a unique addition to the Federal Reserve system.
As Cleveland sits on the interest-rate setting FOMC this year, Hammack will have the opportunity to vote on interest rates at the September meeting. However, her expertise in financial markets and understanding of the Fed’s balance sheet are what truly set her apart in this new role.
Overall, Hammack’s appointment signals a shift towards a more diverse and experienced leadership at the Federal Reserve, with a focus on practical markets expertise and a deep understanding of the financial industry.