November 29, 2017

Amid a Busy Year, E*TRADE Study Reveals Investors Give the Fed Passing Grades

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Investors also express significantly different views across generations on Fed actions

NEW YORK--(BUSINESS WIRE)-- E*TRADE Financial Corporation (NASDAQ: ETFC) today announced results from the most recent wave of StreetWise, the E*TRADE quarterly tracking study of experienced investors. Results indicate that despite a relatively positive assessment, some investors may be looking for change as the Federal Reserve (the Fed) Chair-elect Jerome Powell takes the reigns:

  • Grades are good…but not aces. When grading the Fed on its management of monetary policy in 2017, just 13 percent of investors gave the Fed an "A", slightly less than half (48 percent) gave the Fed a "B", and nearly two out five (39 percent) gave the Fed a "C" or lower.
  • Investors are split on whether new Fed leadership could benefit the economy. Slightly more than half of investors (51 percent) believe a change in Fed leadership is positive for the economy.
  • Investors are also split on the pace of rate hikes this year. Slightly more than half of investors (51 percent) agree with the pace at which the Fed raised rates this year.

"Monetary policy is top of mind for many investors these days, especially as we approach the last Fed meeting of the year," commented Mike Loewengart, VP of Investment Strategy at E*TRADE Financial. "Interest rate hikes and the Fed's balance sheet were dominating themes in 2017. As we embark on a new chapter of the Fed defined by new leadership, many are eager to see if Fed Chair-elect Powell's brand of monetary policy is in fact more of the same, as widely expected, or if a new path is on the horizon."

Mr. Loewengart also offered some observations on how views of the Fed can vary by generation:

  • Boomers are most likely to want to stay the course. More than two out of five (45 percent) Boomers think a change in leadership is negative for the economy—the most out of any age group. This group is also the most likely to think the rate hikes were correctly paced.
  • Millennials are more likely to think the Fed raised rates too quickly. 44 percent of Millennials—nearly double the percentage of Gen Xers and nearly five times that of Boomers—think the pace of rate hikes this year was fast. Having spent the majority of their financial lives in a low rate environment, Millennials may be concerned about investing conditions if interest rates rise significantly.
  • …and Millennials are also most likely to welcome new leadership. 63 percent of Millennials believe a change in Fed leadership is positive for the economy.

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About the Survey

This wave of the survey was conducted from October 1 to October 12 of 2017 among an online US sample of 918 self-directed active investors who manage at least $10,000 in an online brokerage account. The survey has a margin of error of ±3.24 percent at the 95 percent confidence level. It was fielded and administered by Research Now. The panel is broken into thirds of active (trade more than once a week), swing (trade less than once a week but more than once a month), and passive (trade less than once a month). The panel is 58 percent male and 42 percent female with an even distribution across online brokerages, geographic regions, and age bands.

Referenced Data

 
What grade would you give the Federal Reserve for its management of monetary policy this year?
    AGE
  TOTAL 25-34 35-54 55+
A 13% 11% 12% 19%
B 48% 46% 51% 49%
C 29% 33% 30% 21%
D 7% 7% 5% 9%
F 3% 4% 2% 3%
         
         

When it comes to the economy, do you think a change in Federal Reserve leadership would be...

    AGE
  TOTAL 25-34 35-54 55+
Positive (Top 2 Box) 51% 63% 52% 37%
Very positive 10% 14% 9% 8%
Somewhat positive 41% 49% 43% 29%
Unsure 14% 10% 14% 18%
Somewhat negative 26% 23% 25% 30%
Very negative 9% 4% 9% 15%
Negative (Bottom 2 Box) 35% 27% 34% 45%
         
         

Do you think the pace at which the Federal Reserve raised interest rates this year was...

    AGE
  TOTAL 25-34 35-54 55+
Fast (Top 2 Box) 27% 44% 23% 9%
Very fast 4% 11% 1% 2%
Somewhat fast 23% 33% 22% 7%
Neither too fast nor too slow 51% 41% 54% 63%
Somewhat slow 19% 13% 20% 24%
Very slow 3% 2% 3% 4%
Slow (Bottom 2 Box) 22% 15% 23% 28%

"Millennials" defined as age 25-34 // "Gen X" defined as age 35-54 // "Baby Boomers" defined as age 55+

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About E*TRADE Financial and Important Notices

E*TRADE Financial and its subsidiaries provide financial services including brokerage and banking products and services to retail customers. Securities products and services are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Commodity futures and options on futures products and services are offered by E*TRADE Futures LLC (Member NFA). Managed Account Solutions are offered through E*TRADE Capital Management, LLC, a Registered Investment Adviser. Bank products and services are offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries. More information is available at www.etrade.com.

The information provided herein is for general informational purposes only and should not be considered investment advice. Past performance does not guarantee future results.

E*TRADE Financial, E*TRADE, and the E*TRADE logo are trademarks or registered trademarks of E*TRADE Financial Corporation. ETFC-G

© 2017 E*TRADE Financial Corporation. All rights reserved.

E*TRADE Financial Corporation and Research Now are separate companies that are not affiliated. E*TRADE Financial Corporation engages Research Now to program, field, and tabulate the study. Research Now Group, Inc. provides digital research data and has locations in the Americas, Europe, the Middle East and Asia-Pacific. For more information, please go to www.researchnow.com.

 

E*TRADE Media Relations
646-521-4418
mediainq@etrade.com
or
E*TRADE Investor Relations
646-521-4406
IR@etrade.com

Source: E*TRADE Financial Corporation

 

 

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