Last week, Rasmussen released results of a survey it conducted regarding the Federal Reserve. According to the statistical analysis, 74% of adults “favor auditing the Federal Reserve and making the results available to the public.” That was a strikingly high number and thus can lend itself to dramatic interpretations.
I don’t have subscription access to Rasmussen’s details on the poll, but the “teaser” did note one particular hypothesis as to why there may be so much angst here. Since that 74% number is higher than you see on almost every politically-charged question (meaning it is exceedingly rare to see so much agreement on anything, let alone the Fed), reasoned speculation points toward, “perhaps in part because a sizable number think the Fed chairman has too much power over the economy.”
Since we already engaged in hypothetical extrapolation, it probably isn’t too unreasonable to suggest that if, given Rasmussen’s statement above, the economy was growing robustly such interest in the Fed would be rather minimal. After all, if monetary policy were successful in the perceptions of the vast majority of the population, then they would not be as interested in the Fed’s power given any assumed causal relationship. In this case, like so many other political issues, success (from the standpoint of the political agent) yields public apathy, if not downright satisfaction. Therefore we can surmise the inverse as also true.
Again, all the usual caveats apply here including poll interpretations and statistical validity, not to mention that favoring an audit of the Fed is not necessarily the same as dissatisfaction with its policies. However, it also stands to reason that the public is feeling much less warm glow from the current state of economic progress and is beginning (or continuing) to connect the lack of progress with the most obvious factor. QE is very highly visible and it has been sold unambiguously and persistently as an economic elixir.
At some point, given this overall failure to engineer what was promised, patience in QE was bound to run out. The Fed can proclaim “emergency” all it wants, or, as Janet Yellen indicated, the economy is still in need of “aid.” However, it has been 52 months since the Great Recession officially ended, so the there is more than a little disconnect between these sentiments. It is not a big leap to go from dissatisfaction with the current state of the economy to retributions over why that continues to be the case.
What may be more important, and what caught my interest here, is that any change in monetary faith among the population is significant. Again, I may be making too much of one poll and stretching interpretation too far, but it stands to reason that patience over monetary interventions is not unlimited. Further implication of that might extend not just over economic affairs, but investments. We have already learned from this summer that credit markets have very different views on monetary policy and what constitutes “tightening.” Investors may, at some point, begin to question what QE even means to them, even if the economic fundamentals are not enough on their own.
At some point, this waning faith just might, maybe and perhaps, also apply to stocks. Bubbles don’t last forever. Perhaps Rasmussen would provide a vital service by asking the same poll question to those that actually have great access to asset inflation.
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