WASHINGTON (Reuters) - Most Americans don’t know who runs the Federal Reserve, but they do believe that elected officials should stay out of its business, according to a Reuters-Ipsos poll.
Just 24 percent of those polled said Congress should be allowed to have detailed oversight of the Fed, the poll shows. More than double that amount said the central bank should be left alone.
The poll of 1,388 Americans was conducted from Feb 20-24 to measure whether people supported proposed legislation that would expose the Fed to a full government audit, a move being led by Rand Paul, a likely 2016 presidential candidate.
The Republican Senator from Kentucky held an “Audit the Fed” rally in Iowa last month, and his spokesman told Reuters that polls showed Americans want the central bank to be audited.
Supporters of the campaign say the Fed needs more transparency and accountability. Opponents say the Fed is already audited, and that exposure of internal policy discussions could lead to political influence over decisions on interest rates and damage market confidence.
Fed Chair Janet Yellen came under pressure from conservatives in Congress this week, with some accusing her of bias towards Democrats.
When asked about who should be responsible for setting interest rates, 66 percent of the participants said independent experts, while 34 percent said elected officials.
“There ought to be some review but I don’t know that a full public disclosure of every comment attributed to every Fed member for the whole world to see is necessarily the best option,” said David Webb, 64, a former labor relations specialist for the U.S. Army.
The Davenport, Iowa, resident said his concern is that public exposure of the comments invite politicians to manipulate the process, and opens the door for them to apply pressure on Fed officials with whom they disagree, or agree on certain policy matters.
The Fed undergoes annual third-party audits and has been subjected to numerous government reviews, but its internal discussions about monetary policy matters and transactions with foreign banks are among its functions that have been exempt from a government audit since 1978. Paul’s bill, and a similar one raised in the House of Representatives, seeks to end that exemption.
Conservatives have stepped up attacks on the Fed for its handling of the 2008 financial crisis and for the more than $3.5 trillion of bonds it purchased afterward to stimulate the economy. Among their concerns is that the bond buying would cause a surge in inflation and debase the dollar, fears that have failed to play out. The dollar has risen 28 percent since May 2011, while market-based measures show U.S. inflation is declining, still below the Fed’s 2 percent target.
The Senate Banking Committee is holding a Fed reform hearing on Tuesday, where the issue of the audit is expected to be discussed.
Central bank governors are appointed by the White House and subject to congressional confirmation. The Fed is not appropriated taxpayer money, rather it uses interest from securities to provide its budget and transfers profits back to the U.S. Treasury.
The Reuters-Ipsos poll shows that Americans mostly understand that the Fed has influence over interest rates, but are unsure how the central bank works. Some 54 percent of those polled don’t know who the Fed chair is, with 7 percent believing that Alan Greenspan is in charge, and 3 percent naming former Treasury Secretary Timothy Geithner. About 48 percent say they either know very little about the Fed, or have never heard of it at all.
The poll results also show that 49 percent of participants say important decisions about the nation’s money supply should be made without political influence.
“I think the private conversations of Fed officials should remain private,” said Hope Peterson, 48, a telecommunications worker in Kalamazoo, Michigan.
The poll results were weighted to current U.S. population data by gender, age, education and ethnicity. It has a credibility interval - which measures the survey’s precision - of plus or minus 3 percentage points.
Reporting by Michael Flaherty. Editing by John Pickering