For years, conservatives and libertarians have railed against the Federal Reserve’s controversial three rounds of “quantitative easing” (QE for short) that pumped $2.8 trillion through its $85 billion monthly bond-buying scheme.
However, a new Reuters/Ipsos survey finds that 73% of Americans do not know what the phrase “quantitative easing” even means.
Quantitative easing is when the Federal Reserve buys securities to drive down interest rates and prop up the economy.
The survey offered respondents five answer options. Twelve percent of Americans thought QE was a computer program used by the Fed to manipulate the dollar. Eleven percent thought it was something related to Dodd-Frank Wall Street reform.
Two of the most commonly selected incorrect answers at least dealt with Federal Reserve policies. Still, says Northern Trust chief economist Carl Tannenbaum, “the Fed at times has not done a very good job of explaining what it is up to. It’s also fair to say that the state of financial literacy in the United States offers important room for improvement.”