By Andrew Moran
The American people are losing confidence in Federal Reserve Chair Jerome Powell’s leadership as the U.S. economy grapples with crushing inflation and a slowing economic landscape, a new survey revealed.
According to new polling data from Gallup, 36 percent of U.S. adults say they have a “great deal” or a “fair amount” of confidence that Powell would do or recommend the right thing for the economy. This is down from 43 percent a year ago. Twenty-six percent reported “only a little,” and 28 percent responded with “almost none,” the firm’s annual Economy and Personal Finance poll showed.
Gallup numbers also highlight a partisan divide. Sixty percent of Democrats have confidence in Powell, compared to 21 percent of Republicans. About one-third of independents maintained confidence in the Fed chairman.
Powell’s rating is the lowest rating in his six years as head of the central bank and the worst of any Fed head. The closest was former Fed Chair and current Treasury Secretary Janet Yellen, who saw 37 percent in 2014.
“After creating the highest inflation 40 years, it is no surprise that the public has little to no confidence in Fed Chair Jerome Powell,” Dr. Thomas Hogan, senior research faculty at the American Institute for Economic Research (AIER), told The Epoch Times.
But Gallup also found that Americans lack confidence in the nation’s other leaders on the economy.
Nearly half (48 percent) of survey respondents said they had almost no confidence in President Joe Biden for doing the right thing for the economy. Thirty-one percent had almost no confidence in Yellen. A sizable percentage of Americans did not have much faith in Democratic and Republican leaders in Congress either: 41 percent and 33 percent, respectively.
“Americans’ growing concern about the economy is manifested in their views of the key government officials responsible for economic policy. None of these leaders engenders much confidence now, and Americans have similarly low confidence levels in each,” Gallup stated.
Confidence levels typically ebb and flow depending on the economy’s health, the polling firm noted.
“As such, if the economy falls into a recession later this year, confidence in political leaders may erode further. However, if the economy improves and avoids a recession, Americans’ confidence may be restored,” the organization said.
A Brief History of Jerome Powell
Former President Donald Trump first nominated Powell to lead the Federal Reserve in November 2017. The U.S. Senate voted 84 to 13 in favor of Powell’s nomination. In November 2021, President Joe Biden renominated Powell to serve a second term. Again, the upper chamber voted 80 to 19 to confirm Powell, a former investment banker, to the position at the central bank’s helm.
Powell has wrestled with multiple challenges during his tenure at the Fed, including the COVID-19 pandemic, which halted the U.S. economy and crashed the stock market. Powell navigated the country through the turbulence by slashing interest rates to nearly zero, doubling the money supply, and expanding the balance sheet to almost $9 trillion. But this resulted in 40-year high inflation, forcing the Fed to engage in an accelerated tightening campaign by raising the benchmark fed funds rate to its highest level in about 16 years and trimming the balance sheet.
These actions—the most aggressive since Paul Volcker in the 1980s—triggered the 2022 bear market, caused turmoil in the banking sector, increased the federal government’s debt-servicing payments, and bolstered economic uncertainty.
Consumers have also struggled with higher borrowing costs, from automobile loans to credit card rates.
It is estimated that consumers with credit card debt will pay an extra $33.4 billion over the next 12 months due to the Fed’s 500-basis-point increase in interest rates since March 2022, according to WalletHub’s recent Fed Rate Hike Survey.
“People currently seem annoyed by the Fed and concerned about what the coming months may hold. A new WalletHub survey found that 27% more people feel upset about the Fed raising rates again, compared to March, and 46% of people say the Fed’s rate hikes will affect their summer plans,” said Jill Gonzalez, WalletHub analyst, in the report. “Nearly 7 in 10 people say their wallets have already been affected by recent rate hikes, and the potential for more pain is not something Americans are eager to embrace.”
The Fed chairman has repeatedly acknowledged the “hardship” that U.S. households are experiencing as the central bank restores price stability, the institution’s chief mandate.
“My colleagues and I understand the hardship that high inflation is causing, and we remain strongly committed to bringing inflation back down to our 2 percent goal,” Powell told reporters following the May post-Federal Open Market Committee (FOMC) policy meeting press conference.
Over the years, economists and market analysts have held mixed views on Powell.
Some experts, including Nancy Tengler, the CEO and CIO of Laffer Tengler Investments, have argued that Powell’s record has been as poor as former Fed Chair Arthur Burns, who headed the central bank from 1970 to 1978.
Critics assert that Burns kept monetary policy conditions too loose by slashing interest rates in 1971. But as inflation began soaring in 1973 and hitting double digits by February 1974, Burns was forced to raise interest rates dramatically. As a result, the benchmark rate went from 3.3 percent in 1972 to a high of 12.9 percent in the summer of 1974.
In an August 2022 Bloomberg column, former New York Fed Bank President William Dudley suggested that Powell needed to “persuade” the financial markets that he would craft monetary policy like Volcker and not Burns.
“Powell will need to find a way to persuade them that he has no intention of behaving like Arthur Burns (the Fed chair who relented prematurely in the 1970s), lest he later be forced to act like Paul Volcker—who had to correct Burns’s mistake by putting the economy through two recessions,” Dudley wrote.
Meanwhile, David Rubenstein, the billionaire co-founder of global investment firm Carlye Group, thinks Powell has “done a pretty good job.”
“He tells you pretty much what he’s going to do, and then he explains it afterwards. The Fed used to not do that,” he told CNBC in January.