'Voters are not confident in the Federal Reserve,' new Dem poll finds

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The criticisms of Federal Reserve Chair Jerome Powell from the left have been steadily ratcheting up each time the central bank has gathered in recent months to raise interest rates.

The message appears to be breaking through with a wide swath of American voters, according to a new poll released Monday from the Groundwork Collaborative, a progressive group, and Lake Research.

In the nationwide survey, 42% of the respondents said they have little to no confidence in Powell doing what is right for the economy. By contrast, 32% of respondents say they have at least some confidence, and 26% did not express an opinion.

“I have to say, I started out being very worried that we’d have more like 50% of the voters not having any idea what was going on, but there is remarkable awareness,” said Celinda Lake in a briefing Monday with reporters about the poll. “Voters are not confident in the Federal Reserve."

Lake, who was one of the lead pollsters on President Joe Biden’s 2020 campaign, added that voters often brought up the nuances of the Federal Reserve policy as she conducted focus groups in recent months while preparing for the poll.

U.S. Federal Reserve Chair Jerome Powell addresses reporters after the Fed raised its target interest rate by a quarter of a percentage point, during a news conference at the Federal Reserve Building in Washington, U.S., February 1, 2023. REUTERS/Jonathan Ernst
Federal Reserve Chair Jerome Powell addresses reporters during a news conference at the Federal Reserve Building in Washington on February 1. (REUTERS/Jonathan Ernst) (Jonathan Ernst / reuters)

While public opinion may or may not change Chair Powell’s thinking in the months ahead, it could put his monetary policy agency into the political crosscurrents of the 2024 campaign if some Democrats have their way.

The new data also dove into American's views of the broader economy with respondents mirroring other recent polling that has showed most think the current state of the U.S. economy is bad. The poll released Monday also found a majority of voters — 56% — want the Federal Reserve to at least pause its current campaign of increasing interest rates.

The poll was conducted by Lake Research Partners from January 27 through February 5 and surveyed 1,240 registered voters. It has a margin of error of 2.8%.

A focus on 'legislative tools' to fight inflation

Groundwork Collaborative is closely aligned with Sen. Elizabeth Warren (D-MA), who is set to be one of Powell’s many questioners this week.

Powell will take questions from senators on Tuesday as part of his Semiannual Monetary Policy Report to the Congress. He will be back on Wednesday for another Capitol Hill grilling before the House Financial Services Committee. Powell is expected to face a barrage of questions on topics from possible future rate hikes to the potential consequences of the ongoing debt ceiling fight.

Left-wing figures like Warren and liberal economists often argue that the Fed's aggressive rate hiking is the wrong medicine for inflation. They say the economy is not facing a demand problem behind the rising prices; instead, inflation is linked to lingering supply chain issues, the war in Ukraine, and corporate profiteering.

“In effect, what the Fed is saying right now is that because Russia’s invasion of the Ukraine caused energy prices to go up, therefore people who wait tables and clean hotel rooms need to take a pay cut to compensate," J.W. Mason, a senior fellow at the Roosevelt Institute, said at Monday’s briefing.

Warren, a longtime Powell critic, told the Huffington Post in December the chair is “pushing hard to get more people fired because he thinks that is one way to help bring down inflation.”

Moderate Democrats tend to be more supportive of Powell who was confirmed to a second term last May in an overwhelming vote of 80-19.

Monday’s poll also found that about three-quarters of voters say the focus of Washington’s response to inflation should be on “legislative tools” at Congress’s disposal. Still, it’s not clear what — if anything — a divided Capitol Hill is going to produce in the coming years to address inflation.

The poll didn't dive into what those legislative actions could entail, but Lake pointed to more regulations on business as something that was popular among focus group participants. Republicans who control the House are unlikely to be receptive to many ideas on that front.

Voters were also evenly split on the Fed overall, with 40% holding a favorable view of the central bank and an equal number holding an unfavorable view. The remaining 20% had no opinion or never heard of the Federal Reserve.

Ben Werschkul is Washington correspondent for Yahoo Finance.

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