CLEVELAND — Beth Hammack has been on the job as President and CEO of the Federal Reserve Bank of Cleveland since August. It's been time spent getting to know her new hometown and the district she now presides over, all of Ohio and parts of the neighboring states of Pennsylvania, Kentucky and West Virginia.
"My priority for the first 100 days that I've been here has really been to get to know the people in the bank, to get to understand all of our different business lines and to get to know the region," Hammack told News 5 in her first television interview since beginning her 10-year term. “In Pittsburgh we saw the Allegheny Airport Authority, that renovation project that's ongoing. We were down in Lexington we toured a horse farm to understand what that part of the economy is like. In Wooster we looked at a manufacturing plant and went to a small wedding dress shop. So trying to really get a picture of all of the different pieces coming together in the region."
She also came to the job in a year when Cleveland sat on the Federal Open Market Committee (FOMC). The group determines the nation’s monetary policy, including whether interest rates continue decreasing. Voting in September to lower interest rates by 50 basis points in her 4th week on the job. The FOMC will have one final interest rate vote for the year when they meet December 17-18. So what is she thinking?
"The economy is in great shape, we have a very healthy economy, the labor market continues to be strong, growth numbers continue to be strong but the one thing that's been a little bit sticky has been inflation. It continues to be above our target of 2%. It's come down tremendously since 7.2% a couple of years ago but it still is a little bit above where we want it to be. So we'll take that into consideration as we think about what the right decision is at our next meeting. We still got about 12 days left and a bunch of data coming in between now and then and so I'm keeping an open mind for what the right decision will be at that meeting."
Their interest rate decision is the last before President-elect Trump's swearing-in. It comes amidst his threats to impose tariffs on America's three biggest trading partners, Canada, Mexico and China. Costs that experts predict will be passed on to consumers, causing prices to rise. Will that be a factor she looks at related to how she votes, or is it a bridge they'll cross when they come to it.
"We wait until it happens to deal with it," Hammack said. "You never really know what's going to happen with policies. They tend to evolve over the time that they're being considered and so we don't want to act prematurely, we wait until we see what policies are enacted and then we'll incorporate that into our decision making."
The Federal Reserve System was created by an Act of Congress in 1913, and Cleveland, then the largest city between the East Coast and Chicago, was chosen as the site of one of just 12 such banks in the entire country. Hammack will speak Friday at the City Club of Cleveland, hoping to give insight into the bank's role in our lives.
"I've been surprised by how many people I know, even people who are working on Wall Street, who don't really understand everything that the Federal Reserve does," said Hammack, who was co-head of the global financing group at Goldman Sachs Group before being named president of the Cleveland Fed. "And so for me part of my mission is to make sure that the public understands and appreciates all of the benefits that we bring to the table." A conversation she said she hopes is two-way.
"Letting people know that I want to hear from them. I want to know what they're worried about, what they're thinking about because again my most important responsibility is representing the Fourth District at the FOMC table in Washington."
The area covered by the Federal Reserve Bank of Cleveland is a microcosm of the country: urban, rural, farming, and manufacturing. So, how does Hammack see its financial future?
"The feedback that we've been getting from our contacts is that they are experiencing growth but it's more modest than what we're seeing at the national level," she said. "The number one concern I hear from business leaders is really around talent and their ability to find excellent talent who can fulfill the roles that they want and so there's concern on that front too but generally speaking the economy is healthy and the economy in the Fourth District is healthy. Maybe at a slightly slower pace than the national but still quite strong."
Hammack grew up outside Philadelphia in Villanova, but her husband is a native of Shaker Heights. With two kids in college, they're living in the University Circle area and enjoying all that Cleveland has to offer.
"We love our new hometown, we've been really enjoying it. We've been out to Guardians games, Cavs games, we've been enjoying the MetroParks system which is fantastic. We're walking distance to the Art Museum and it's such a gift to be able to walk in, see one painting for 30 minutes and walk out and not feel guilty about it," she said. "Cleveland is fantastic."
