The Federal Reserve Bank of Cleveland named former Goldman Sachs executive Beth Hammack as its next president, adding a longtime Wall Street figure to the powerful central bank committee that decides the direction of interest rates.

The 52-year-old Hammack will replace current president Loretta Mester, who is set to retire on June 30 in accordance with the Fed's mandatory age and length-of-service policies. Mester is 65 years old.

The change comes at a critical time for the Fed as it weighs whether to cut rates from a 23-year high. Many Fed officials have said they expect rates to stay elevated for longer than expected following some hot inflation reports in the first quarter of the year.

Read more: What the Fed rate decision means for bank accounts, CDs, loans, and credit cards

Hammack will take office on Aug. 21 and will become a voting member of the Federal Open Market Committee, the group at the Fed that ultimately decides the direction of monetary policy.

To fill in the gap until Hammack's August start date, Cleveland Fed first vice president Mark Meder will serve as interim president once Mester steps down at the end of June.

Hammack worked for Goldman for more than 30 years, most recently as co-head of global financing. She previously held jobs as the firm's global treasurer, global head of short-term macro trading, and global head of repo trading.

She left the Wall Street giant earlier this year.

Hammack has also worked closely with US policymakers as chair of the Treasury Borrowing Advisory Committee and as a member of the Financial Research Advisory Committee and the Treasury Market Practices Group.

"I am honored to become the next president of the Federal Reserve Bank of Cleveland," Hammack said in a statement. "It is a great privilege to serve the Fourth District, and the country, in fulfilling our mission of fostering a strong, stable economy in which all Americans have the opportunity to prosper."

Mester assumed her role as president and CEO of the Cleveland Fed in June 2014.

Fed rules require regional bank presidents to serve a 10-year term if they were appointed after turning 55, a situation that applies to Mester. They also have to retire by age 65 if they were appointed before turning 55.

Mester will cast her last vote at the Fed’s June policy meeting.

Mester has been among the Fed officials cautioning that rates will likely stay higher for longer. She said this month she no longer thinks three rate cuts are appropriate this year given disappointing inflation data in the first quarter.

She said she wants to see "a few more months" of falling inflation data before cutting rates.

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