WASHINGTON (Reuters) – President Donald Trump’s barrage of tweets blasting the U.S. Federal Reserve appears to have been ignored by both Republicans and Democrats who largely see the central bank as neutral in its decision making, according to results of a new Reuters Ipsos poll.
FILE PHOTO: Federal Reserve Board building on Constitution Avenue is pictured in Washington, U.S., March 19, 2019. REUTERS/Leah Millis/File Photo
In more than a year of tweets to his nearly 65 million followers, Trump has blamed the Fed with sometimes personal attacks for squelching economic growth and the stock market, and tying his hands in trade negotiations with China.
Yet asked who is “responsible for the current state of the American economy,” 44% said Trump had “a great deal” of responsibility, compared with 17% for the Fed.
Among the 4,174 survey respondents, only 9% said they felt the Fed makes decisions “to intentionally hurt the president,” while just 14% said the Fed was trying “to intentionally help” Trump in the decisions it makes about interest rates.
While the survey results split slightly along party lines, even among Republicans only 13% said they felt the Fed was trying to damage the president with its policies, while 19% of Democrats thought the Fed was trying to help Trump.
That compares to 45% who said the Fed was acting neither to help nor hurt the president, a Republican, and a third who said they did not know.
The survey results are a potentially important sign for the central bank that the steady negative commentary from Trump hasn’t undercut public support for a body of technocrats to oversee setting interest rates.
Among all respondents 55% said they felt interest rates “should be the responsibility of independent experts,” while only 23% felt they should be set by elected officials. The figure was even higher, in excess of 60%, among Republicans in suburban and rural areas, arguably the core of Trump’s electoral base.
Overall 57% of respondents said they were “very familiar” or “somewhat familiar” with the Fed, while only 6% of respondents said they had “never heard of it.”
GOOD NEWS FOR FED
“Those results are very good news for the Federal Reserve and affirm the public perception of it being independent and being non-partisan,” said Nathan Sheets, a former Fed and U.S. Treasury official and currently chief economist at PGIM Fixed Income.
Perhaps as significant for the Fed, which regards its credibility as central to its effectiveness, financial market participants “would have a broadly similar perspective,” Sheets said.
That conclusion was supported in a separate Reuters poll of economists in which 80% of respondents said they did not think the Fed is influenced by Trump’s criticism.
Fed officials regard their power to make independent decisions about interest rates as key to setting monetary policy that supports high employment and stable prices – the goals assigned to the central bank by Congress.
That can sometimes clash with what elected officials see as the best course of action, particularly when it comes to their reelection campaigns.
The reelection losses of Democrat Jimmy Carter in 1980 and Republican George Bush in 1992 were both blamed at least in part on tight Fed policy.
Trump has demanded the Fed take a series of actions in recent months, including sharp interest rate reductions and the restart of crisis-era policies to stimulate economic growth.
The criticism has been particularly intense in recent weeks as Trump’s trade war with China seemed to dampen economic growth more than anticipated ahead of a 2020 election campaign.
The Fed has cut interest rates twice this year, including this week, but has ignored the president’s advice for more dramatic action.
That hasn’t made the Fed fully independent in the public’s eye: 46% of respondents said the Fed is “influenced by politicians/politics.”
The Reuters Ipsos poll was conducted online from Sept. 10 to Sept. 16 throughout the United States. It gathered responses from 4,174 adults and has a credibility interval, a measure of precision, of two percentage points.
Reporting by Howard Schneider; Additional reporting by Chris Kahn; Editing by Andrea Ricci