Jul 14, 2020 - Economy

Americans lost trust in the Fed as stocks rose to new highs

Data: Axios/Ipsos poll; Note: 1,063 U.S. adults were surveyed in July with a ±3.1% margin of error; Chart: Andrew Witherspoon/Axios
Data: Axios/Ipsos poll; Note: 1,063 U.S. adults were surveyed in July with a ±3.1% margin of error; Chart: Andrew Witherspoon/Axios

The number of Americans who say they have a great deal or fair amount of trust in the Federal Reserve fell to 41% in the latest Axios-Ipsos Coronavirus Index.

Why it matters: The results show that as the stock market rose to new highs and credit markets have shown significantly improved functioning over the past two months, Americans' trust in the Fed declined.

By the numbers: Mistrust of the Fed continues to continues to defy age, race and even level of education, with a majority of respondents across the board saying they either had very little or no trust at all in the central bank.

  • 6% of respondents say they trust the Fed a great deal, compared to 19% who say they do not trust the Fed at all.

One level deeper: However, the latest decline does largely reflect political leanings.

  • Trust has been little moved among Republicans, 54% of whom say they trust the Fed compared to 55% in May.
  • But just 37% of Democrats say they trust the Fed, down from May's 44%.
  • And 39% of independents trust the Fed, down 9 percentage points from May.

The intrigue: Surprisingly, the Fed's ratings don't improve much with investors.

  • Of those who own financial assets like stocks, 42% say they have some trust in the Fed versus 38% of those who don't own financial assets.

The big picture: "We are seeing a broad-based decline in confidence in all measures of government institutions stemming from the failure to contain COVID-19," Chris Jackson, senior vice president for Ipsos Public Affairs, tells Axios.

  • 32% of respondents in the latest poll said they had a great deal or fair amount of trust in the federal government.
  • That's down from 53% of respondents in the March 20–23 survey.
  • The Fed's falling ratings "are really just collateral damage," Jackson says.
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