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Only 61% of CGMAs Surveyed Think the Second Most Important Person in America After the President is Important

You guys probably didn't watch Janet Yellen's confirmation hearing yesterday but I did because Janet has long been one of my least favorite Fed characters, since before she returned to Washington to serve as Fed Vice Chair. Frankly, I'm horrified that she'll be running the show over there but that's not important right now.

The AICPA helpfully surveyed a group of CGMAs in mid October to get their input on this very important matter that will no doubt affect us all, from clients to businesses, kids to cats. Yes, cats. My cats are directly impacted by the decisions of the Federal Reserve since someone has to work and buy all that cat food; the Fed's moves can be the difference between eating well and eating the only slop I can afford. My cats already know this because I believe it is important to teach basic economics, monetary policy and financial literacy young, as early as kittenhood in fact.

I wonder, though, why a large chunk of the CGMAs surveyed don't know what my cats know. Here's the press release from the AICPA:

Janet Yellen’s comments at her confirmation hearing to become Federal Reserve chairman reverberated beyond the Senate Banking Committee on Thursday, and could influence the planning and decision making of nearly two-thirds of the nation’s CFOs and finance chiefs.

Sixty-one percent of senior Chartered Global Management Accountant designation holders surveyed by the American Institute of CPAs said the comments and actions of an individual Fed chairman have at least moderate influence on their business planning. That’s due in large part to the role they see for the Fed chairman on the world stage. The majority, 58 percent, say the person in the position has significant influence on the world economy. Already, some CFOs and other senior finance leaders are rethinking investment strategies, borrowing strategies and hiring strategies, according to the survey.

“As leader of the central bank for the world’s largest economy, the Federal Reserve chairman has considerable sway over the cost of capital, the strength of the dollar and other facets that affect how we do business,” said James R. Blake, CPA, CGMA and CFO of Morey’s Piers in New Jersey.  “Finance teams across the country and around the world are monitoring the confirmation process for any hints of shifts in policy direction that could have repercussions for business planning.”

I was totally on board when they acknowledged that an individual Fed chairman only has so much power — since the Fed largely functions as a committee — until they said "the majority, 58 percent, say the person in the position has significant influence on the world economy" considering the position of Fed chair is pretty much the most powerful slot in America after the president. Think about it: if the U.S. economy goes bust and the government goes "bankrupt," the chairman of the Fed will still have a job and now need to hire a collection agency to get all the money we owe them.

The survey continues:

The majority, 59 percent, of CGMA designation holders surveyed don’t think change in Fed leadership will hasten the economic recovery. The change does little to alleviate one of the biggest obstacles they face – uncertainty in Washington. Indeed, those finance leaders surveyed said uncertainty in the nation’s capital is the biggest external challenge they face, ahead of shifting customer demands, access to capital and the pace of technological change

This I mostly agree with. Janet is basically just Bernanke with lipstick on in some areas. Putting her in as Fed chair changes nothing as to the impossibility of a true Fed exit strategy, and the Fed has been nothing but consistent in the last few years so any uncertainty in Washington isn't their fault.

All said, I'm highly disappointed by this survey. If CGMAs want to appear to be authorities on global business, then understanding the basics of the Fed is sort of required. That James guy quoted above gets it. A decent majority of CGMAs surveyed seem to get it. But what about the rest?