Although U.S. CFOs and finance chiefs say a Federal Reserve chairman has the ability to significantly affect the world’s economy, they are not optimistic that the coming change in Fed leadership will hasten the economic recovery.
Nearly six in 10 (59%) of 688 U.S. CGMA designation holders surveyed in October said the arrival of a new Fed chairman would not speed up the economic recovery.
Fed Vice Chair Janet Yellen was recommended by a US Senate committee Thursday. If confirmed by the full Senate, she will succeed current Chairman Ben Bernanke.
The survey responses demonstrate ongoing concern about the U.S. government. A majority (58%) of survey respondents said the Fed leadership position can significantly influence the world economy, but they said uncertainty in Washington is the biggest challenge they face, ahead of shifting customer demands, access to capital, and the pace of changes in technology.
Sixty-one per cent of CGMA respondents said the comments of a Fed chairman have at least a moderate influence on their business planning.
“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,” Jim Blake, CPA, CGMA, who is CFO of Morey’s Piers amusement parks in New Jersey, said in a news release. “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.”
As lawmakers mull Yellen’s nomination, survey respondents said they want to see more focus on unemployment and transparency. Strategies for investment, borrowing, and hiring are among the plans some CGMA designation holders are rethinking as the Fed leadership change occurs, according to the survey.
Thirty percent said they wanted to see a faster end to the Fed’s quantitative easing program.
— Ken Tysiac ( ktysiac@aicpa.org ) is a JofA senior editor.
