Gary Cohn, the former Goldman Sachs president and National Economic Council director, said consumer polling on the economy has turned sharply negative even as real wages and spending hold up.
Markets spent the week reading a jump in Treasury yields as proof households are cracking. Cohn's reading runs the other way: fear about AI, oil, the war and housing prices is driving sentiment surveys, not spending.
"I think we're going to continue to be in this cycle where there will be enormous fear."
Cohn ran the National Economic Council under Donald Trump's first term, was president of Goldman Sachs, and is now vice chairman at IBM.
I listened to the full segment so you can skip it.
Here are the 3 calls that matter.
👤 Guest: Gary Cohn, former director of the National Economic Council and former president of Goldman Sachs, now vice chairman at IBM
🎙️ Host: Scott, a co-anchor of Squawk on the Street on CNBC
📰 Published: 10 September 2026 on CNBC's Squawk on the Street
🟣 Apple Podcasts | 🔗 Episode page | ⏱️ 4 min
Key Takeaways
Rising Treasury yields are directly correlated with oil right now, and that combination is what's driving inflation fear
Consumer polling reads negative, but real wages and spending say otherwise
He said watching what people do rather than what they say in surveys is the better guide
Bank loan repricing is already happening in real time, from credit cards to mortgages to auto loans
He linked it to Treasury Secretary Bessent's attempt to flatten the curve and weaken the dollar to help exports
1. Fear Without the Data
Cohn tied the yield move directly to oil. "I think the Treasury yields are directly correlated to what's going on in oil. I mean the oil the oil rate market correlation is very high today. I think people are very concerned with the oil price. It all feeds into the general consumer mentality. And it also feeds into the inflation fears."
He said the gap between how people answer surveys and how they actually behave has become the defining feature of this economy. "If you actually poll consumers today on how they feel about the economy, the polling is pretty negative. If you actually look at the real data and you look at real wages and you look at spending... the consumer continues to be in a fairly decent situation. You know, their positive wage growth, there's things going on that are positively driving the economy."
He counted the sources of fear driving the surveys: "There's fear of AI, there's fear of oil prices. There's there's fear of the war going on. There's fear of housing prices. All of these things are driving consumer sentiment, but they're actually not flowing through the real economy."
2. Repricing Already Live
Cohn said the pain from higher rates shows up first in consumer borrowing, not in the Fed funds rate itself. "We've seen credit card rates go higher. We've seen automobile loans go higher. We've seen mortgage rates go higher. So the direct impact on consumer, which of course is not Fed Funds, which is what the Fed deals with, is already working its way through the market."
He described the transmission as close to instantaneous: "There's a real time reaction when the futures market trades up and the cash market trades up, banks reprice loans to their consumers almost instantaneously"
Higher borrowing costs cut into purchasing power as people finance ordinary needs. "There is a continued negative effect on the economy as people try and borrow money to spend to home improvements, cars to anything they need to borrow money for the cost of money gets more expensive, their purchasing power goes down"
3. Reading Bessent's Playbook
Cohn said the Treasury's interest in the bond market comes down to the dollar. "I think that's another reason that the Treasury is involved in the Treasury market. I think they're concerned about the dollar. I think they'd like a weaker dollar which may be inflationary. But at the end of the day, it makes our exports more affordable"
He was skeptical that intervention holds for long. "It's very difficult to actually intervene in a market and have it work long term. There's very few cases I would almost point to. There's almost no case."
He credited Bessent with knowing that as well as anyone. "He knows that ultimately, the market is the market, and the market will find a natural clearing level. If he's impacting the market or he's impacting duration for some period of time, that too will come to an end. And so I understand what he's trying to do. I understand he's trying to put a curve flattener on. He's trying to flatten the curve."
Bonus Insights
Before the interview cut away, Cohn brought up a fresh political flashpoint on AI, noting that Senator Bernie Sanders now wants to ban superintelligence following an unnamed post, though the transcript ends before the topic is developed further.
Cohn's bottom line is that real wages and spending, not sentiment surveys, are the read to trust — while higher borrowing costs from the bond selloff are already working their way through consumers in real time.
Products, Companies & Tools Mentioned
IBM (Where Cohn is now vice chairman)
Goldman Sachs (Cohn's former firm, where he was president)
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