Comments from the Fed’s Hammack cross the wires:Treasury rates right now are “modest” by historic standards.If the economy were to return to a 3% home mortgage it would likely mean something had gone wrong in the economy.The neutral rate is likely higher but it is hard to pin down.Hearing “early warning signs” of a possible problem with inflation expectations.Need to “cool the economy at the margins.”Higher interest rates won’t dissuade hyperscalers, but might influence firms in other industries.The question for the Fed now is how fast to make policy more restrictive.Don’t want to threaten the jobs side of the Fed’s mandate.There is more restraint that is needed; if monetary policy does nothing market conditions would change.Comments from low income workers was first about trading down, now they are beginning to juggle what bills to pay.Analysis: The message is hawkish. Hammack is framing the debate around how quickly to make policy more restrictive. Her concern about inflation expectations is key. If households and businesses begin to expect persistently higher inflation, bringing inflation back down could become more difficult.However, she also recognizes the balancing act. Lower-income workers are struggling to pay bills, and she does not want to threaten jobs. For traders, the comments lean toward tighter policy, but leave the pace unresolved. Her view that the neutral rate is likely higher also suggests that today’s rates may provide less restraint than their level alone would imply. This article was written by Greg Michalowski at investinglive.com.