Beth Hammack is the president and CEO of the Cleveland Fed, and a member of the Federal Open Market Committee (FOMC) which makes the all-important decision about America’s base interest rate.
Hammack spent much of her career on Wall Street with Goldman Sachs, latterly serving as co-head of the global financing group and a member of the management committee—and as such still keeps a close eye on financial markets as a barometer of the economy’s health. While financial markets aren’t the real economy, Hammack said markets act as an “important signal for businesses that they consider when they’re thinking about raising capital and thinking about whether they whether or not they want investments.”
The optimism Hammack outlined has pushed the S&P 500 to a record high of above 6,600—with analysts expecting that figure to push higher later in the year.
Hammack didn’t comment on whether or not the market’s assumption was correct.
Likewise the Conference Board’s consumer confidence barometer for September will be released tomorrow, but was already showing the beginning of a dip in August. Last month it fell 1.3 points in to 97.4—compared to a baseline of 100 benchmarked to 1985. The main reason for this drop, according to Stephanie Guichard, senior economist, global indicators at the Conference Board, is consumers’ appraisal of current job availability which declined for the eight consecutive month.
Compounding the issue of a tight jobs market, where consumers feel they may struggle to get a job or move into a better paying role, is the issue of tariff-induced inflation. While the Fed has been urged—and has indicated it will—”see through” tariffs as a one-off hit to prices, consumers will still have to pay their way through the spike.
