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One in Three Respondents See Negative Impact From the Fed

This week’s Sentiment Survey special question asked AAII members what type of impact they perceive monetary policy to be having on the stock market. More than one out of three respondents (37%) said that the Federal Reserve is having a negative impact. Several (12% of all respondents) believe that continued low interest rates are artificially boosting stock prices and/or creating long-term harm, that rate hikes will hurt stock prices or that the central bank is creating uncertainty. Nearly 25% of all respondents do not believe that the Federal Reserve is having much or any impact on stocks, primarily because of the gradual pace at which rates are being raised. Only 8% of all respondents think the Federal Reserve is having a positive impact on the stock market.

Here is a sampling of the responses:

  • “None. I think an expected gradual rise in interest rates is already priced into the markets.”
  • “A dampening effect—any rise in rates spooks investors.”
  • “Downward impact because of the uncertainty caused by failing to be specific about what their plans are regarding interest rates.”
  • “Keeping interest rates low is driving money into the market and fueling the bull.”
  • “No impact so far. The move by the Fed was too small to have an impact. Also, other economic factors have come into play.”
  • “More than it should by any measure.”

Want to weigh in? Take the survey yourself and see results online at http://www.aaii.com/sentimentsurvey.

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