According to a new national poll just released by the Cato Institute, Americans know very little about the Federal Reserve. Not surprising. But among those who are familiar with its work, most think it should not be setting interest rates.
The poll, conducted in collaboration with YouGov, surveyed a nationally representative sample of 2,000 Americans.
Only 20 percent of those surveyed said they have heard of the Federal Reserve and "understand what it does very well." Fifty percent said they had heard of the Fed, and 22 percent said they had heard of it, but were not sure what it does. Six percent said they had never heard of the Fed before.
We then asked whether Fed officials or the free market should determine interest rates in the economy. Perhaps unsurprisingly, 44 percent said they hadn't thought enough about the issue to have an answer. While fewer than one in four said the Fed should manage rates, nearly a third said the free market should. Focusing only on those with an opinion, a majority (58 percent) said they preferred the free market system determine rates.
When asked about the Fed's independence, 57 percent said that the Fed operates independently while 38 percent said that it is influenced by Congress and the President. These responses were closely tied to education. Among those with post-graduate degrees, 70 percent said the Fed is independent while only 53 percent of those without a college degree thought so.
We also asked whether people thought that the Fed helped to stabilize the economy. The responses were mixed with 38 percent saying it does, 24 percent saying it does not, and another 36 percent saying they hadn't heard enough to say. Responses were even more equally split when we asked about the Fed's role in the 2008 financial crisis. While 30 percent said the Fed cut short the crisis, 33 percent said it had no impact, and another 33 percent said that it was a cause of the crisis. These responses were highly correlated with political views. Among those identifying as very liberal, 52 percent said that the Fed helps stabilize the economy and 23 percent said that the Fed was a cause of the financial crisis. Among those identifying as very conservative the views flipped: 50 percent said that the Fed was a cause of the crisis while only 26 percent said that the Fed helps stabilize the economy.
Ultimately, these findings highlight the urgent need for more education about what the Fed does, what it doesn't do, and what it shouldn't do. Cato's Center for Monetary and Financial Alternatives was founded in part to provide just such an education to the public. While it's disheartening to see how much we're needed, it seems it's a good thing we're here.
Find the full survey results and analysis here.
Co-authored by Emily Ekins, research fellow and director of polling at the Cato Institute.
 The Cato Institute 2017 Financial Regulation Survey was designed and conducted by the Cato Institute in collaboration with YouGov. YouGov collected responses online May 24-31, 2017 from a national sample of 2,000 Americans 18 years of age and older. Restrictions are put in place to ensure that only the people selected and contacted by YouGov are allowed to participate. The margin of error for the survey is +/- 2.17 percentage points at the 95% level of confidence.