Survey: Americans don’t trust the Fed

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Americans are losing confidence in the Federal ReserveIt seems that the current credit crisis has eroded many Americans’ confidence in financial institutions and the government’s ability to set monetary policy.

A new poll conducted by Reuters and the University of Michigan found that more than half of U.S. consumers say they have less confidence in the Federal Reserve than they did five years ago.

And 29 percent of respondents reported having "a lot less" confidence in the Fed.

Survey director Richard Curtin said that these findings could indicate that "a longer and deeper recession" is on the horizon.

"This loss in confidence will cause consumers to accelerate their spending cutbacks and those reductions are likely to persist through most of 2009," he wrote in the report.

In contrast, following the 1987 stock market crash, less than one in five consumers (19 percent) said they had less confidence in the Fed, with seven percent reporting a lot less confidence.

On Friday, President Bush made a statement about the government’s efforts to combat a more serious economic downturn, saying that it was instigating an "aggressive" plan to restore equilibrium. He also urged Americans to have confidence in the government’s ability to solve the problem.
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