Janet Yellen Heads to Jackson Hole With "B" Grade From Financial Industry As Federal Reserve Is "Behind the Curve" on Rates

NEW YORK, Aug. 21, 2014 /PRNewswire/ -- ConvergEx Group, a leading provider of global brokerage and trading-related services, has released the results of its U.S. Monetary Policy Survey, exploring financial industry sentiment about the Federal Reserve, Chairwoman Janet Yellen, and U.S. monetary policy heading into the annual economic symposium at Jackson Hole, Wyoming, sponsored by the Federal Reserve Bank of Kansas City.

While Chairwoman Yellen receives a "B" grade from financial professionals, fewer than half (49%) of those surveyed approve of the job the Federal Reserve is doing. A clear majority (59%) of respondents describe the Fed as being "behind the curve" with respect to interest rates, while just one-third (32%) say interest rates are where they should be. Similarly, only 38% say they are "confident" or "very confident" that the Federal Reserve will make the right policy decisions. Two-thirds (66%) said the Fed has too much influence on capital markets.

"The financial industry likes Janet Yellen but believes she leads a central bank that is overexposed and behind the curve," said Nicholas Colas, ConvergEx Group chief market strategist. "There's tangible fear among investment professionals about the unwinding of Quantitative Easing and the painful increases in rates that will follow. Our survey shows that Ms. Yellen is seen as a strong leader, and investors don't want to scrap the structure of the Fed, but there is real concern about what happens next."

Respondents were also asked to name the Federal Reserve chairperson they believed had done the best job during his or her tenure. Almost half of respondents named Paul Volcker (48%), followed by Ben Bernanke (31%) and Alan Greenspan (18%).

For more information on the ConvergEx Group U.S. Monetary Policy, click here.

Approval Ratings
More than half of respondents (53%) gave Janet Yellen a rating in the "B" range. Key findings:

• A+/A/A- 23%
• B+/B/B- 53%
• C+/C/C- 14%
• D+/D/D- 4%
• Failing 6%

Fewer than half (49%) of those surveyed approve of the job the Federal Reserve is doing. Key findings:

• Approve – 49%
• Disapprove – 32%

Behind the Curve
With respect to interest rates, a clear majority (59%) found the Fed to be "behind the curve". Key findings:

• Behind the Curve/Rates Should Be Higher – 59%
• Ahead of the Curve/Rates Should Be Lower – 9%
• Just Right/Rates Are Where They Should Be – 32%

Influence and Confidence
Two-thirds of investment professionals say the Fed has too much influence on capital markets. Key findings:

• Too Much Influence – 66%
• The Right Amount of Influence – 31%

Respondents were evenly split on their confidence in the Federal Reserve making the right policy decisions. Key findings:

• Confident/Very Confident – 38%
• Neutral – 28%
• Not Confident/Not At All Confident – 34%

Favorite Fed Chair
Paul Volcker earned almost as many votes as the next two names combined. Key findings:

• Paul Volcker – 48%
• Ben Bernanke – 31%
• Alan Greenspan – 18%
• Marriner Eccles – 2%
• Arthur Burns – 1%
• Janet Yellen – 0%

Methodology
The ConvergEx Group U.S. Monetary Policy Survey was performed by ConvergEx via an online survey of financial industry participants, resulting in 219 respondents. The survey was conducted from August 12 to August 14, 2014, and has a margin of error of ± 10%. Respondents included buy-side firms (asset managers, hedge funds), sell-side firms (banks, broker-dealers), trading venues, service providers and other financial industry participants.

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SOURCE ConvergEx Group