Hammack's statement is particularly significant because of her institutional position. She was one of three FOMC dissenters in July — alongside Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan — who voted for a 25 basis point hike rather than the hold that the 9-member majority chose. Her presence at Jackson Hole, combined with her explicit "now is the time to act" formulation delivered in a live television setting rather than in prepared academic remarks, signals that the hawkish minority has not softened its position in the weeks between the July meeting and the September decision. Her anecdote from her recent district tour added a human dimension: "I recently met with workers in Erie, Pa., who were all saying that they're feeling a sense of despair. They're working every day, coming in, they've got good jobs, and yet they still feel like they can't make ends meet. They can't go and afford an ice cream cone on the weekend with their kids." |
Market pricing continued to suggest investors do not expect a September hike despite Hammack's public call. Rate futures indicated the Fed would stay on hold at both September and October meetings and wait until December for any move. That disconnect between Hammack's explicit "now is the time" statement and the market's December pricing reflects either investor confidence that Warsh's majority will hold, or a belief that the macroeconomic environment between now and September will provide sufficient evidence to justify the hold position. |
