Fed's Hammack (2026 voter) says Fed jobs number was a disappointment; economy overall brightening; labour market stabilising
- Right around neutral.
- Not overly restrictive, based on banks and firms I'm talking to.
- Should stay at least around neutral to bring inflation down.
- Could be on hold for quite some time.
- Shrinking balance sheet is a discussion they should have.
- Question on balance sheet is whether ample or scarce reserves regime.
- Reasonable question to ask if better to be in Treasuries or in repos.
- Economy is in a reasonably good place.
- Too soon to say the impact of the oil price rise.
Context
Fed's Hammack's remarks indicate a cautious yet optimistic view on the economy, suggesting that despite a disappointing jobs number, overall economic conditions are improving. His stance on maintaining a neutral policy reflects a readiness to address inflation without rushing to tighten, which may keep rates stable for an extended period. As the Federal Reserve remains focused on the balance sheet discussion, these comments could influence market expectations for future monetary policy and impact fixed income and currency dynamics.
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