ERIE \u2014 A member of the Federal Reserve committee that sets the nation\u2019s interest rate policy was in Erie last week. <\/p>\n
Beth Hammack, president and CEO of the Federal Reserve Bank of Cleveland, spent the day talking to businesses in downtown Erie as well as other local employers like JTM Foods. She also held roundtable discussions with workers and local leaders.<\/p>\n
That knowledge helps Hammack do her job. She is one of 19 members of the Federal Open Market Committee. That committee sets the target range for a short-term interest rate called the federal funds rate\u2013which in turn influences interest rates on everything from mortgages to car loans to credit cards.<\/p>\n
So Hammack has to be well informed about the economy \u2014 at the national level, but especially in the region served by the Cleveland Fed, which consists of Ohio, western Pennsylvania, eastern Kentucky and the northern panhandle of West Virginia.<\/p>\n
\u201cI\u2019m here to listen,\u201d Hammack said. \u201cI keep a close eye on the hard economic data, but it\u2019s critically important that I connect with business and community leaders about what\u2019s happening on the ground. Those conversations give me a better sense of not just where the economy is today, but also insight into the decisions leaders are making right now, which tells me where the economy may be headed\u2013before it shows up in the official data.\u201d<\/p>\n
The visit to Erie is Hammack\u2019s first since joining the Cleveland Fed in August 2024, and it\u2019s just the latest example of the Reserve Bank\u2019s efforts to deepen its ties to the region.<\/p>\n
For instance, in early 2024 the Cleveland Fed formed its Northwest Pennsylvania Business Advisory Council, a group of 15 local leaders who regularly give Cleveland Fed staff insight into area economic conditions.<\/p>\n
One of those advisory council members is Kyle Hinsdale, chief financial officer at JTM Foods. He helped lead the tour at the JTM plant, which makes snack pies and other treats.<\/p>\n
\u201cIt\u2019s important that local industries, employers, and communities have a voice in conversations about the economy, and I\u2019m proud to contribute perspectives that reflect the experiences of our employees, and customers,\u201d Hinsdale said.<\/p>\n
During the roundtable with workers, one of the main topics on the agenda was how they\u2019re dealing with rising costs.<\/p>\n
Inflation often comes up when Hammack visits communities across the area served by the Cleveland Fed. \u201cInflation has been higher than the Fed\u2019s 2 percent target for the past five years, which means people have experienced about 10 years\u2019 worth of inflation in that time,\u201d Hammack said. \u201cPeople are feeling that pain, and that\u2019s why we need to return inflation to our 2 percent target.\u201d<\/p>\n
A growing share of business and community leaders throughout the Cleveland Fed\u2019s district have been reporting rising nonlabor costs, which exclude expenses such as wages and benefits, since September 2024, according to the Cleveland Fed\u2019s contribution to the Beige Book report. That Federal Reserve publication provides timely descriptions of regional and national economic conditions.<\/p>\n
The increase in nonlabor costs is partly due to tariffs and, more recently, higher gas prices, the report stated. Contacts in the district also reported modest increases in business activity in recent weeks.<\/p>\n
Erie-area companies have contributed insights to the Beige Book for decades, most recently through the Cleveland Fed\u2019s Survey of Regional Conditions and Expectations.<\/p>\n
But the Reserve Bank\u2019s ties to the region go back much further. The Cleveland Fed has served as a \u201cbank for banks\u201d in the Erie area since the Federal Reserve System began operations in 1914. The Cleveland Fed supervises banks throughout its district to ensure they operate in a safe and sound manner and provides them with various services. Among them: Distributing physical cash \u2014 aka Federal Reserve Notes \u2014 and making loans to banks, especially during times of economic stress. <\/p>\n
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