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Yellen earns worst grade yet in CNBC Fed Survey

Facing growing criticism from Wall Street, Federal Reserve Chair Janet Yellen earned her worst grade yet in the latest CNBC Fed Survey.

The 41 survey respondents, who included money managers, investment strategists and economists, gave Yellen a C+ overall grade — a full letter markdown from the last time she was graded, six months ago.

Only 8 percent granted the Fed chief an "A" rating, down from 36 percent in April.

"She appears indecisive, even if she knows what she wants to do," said Joel Naroff, president of Naroff Economic Advisors.

The lower grade comes amid growing concern about Yellen's leadership and communication. Respondents gave Yellen lower marks in both of these categories than they did in April.

Wall Street has been critical of the Fed's communication since its last policy meeting in September, when the committee decided to hold off on raising the federal funds rate.

"Their communication has added to, rather than lessened, market confusion," said John Donaldson, vice president and director of fixed income at Haverford Trust. "They need to speak with one voice instead of the cacophony that we are currently hearing."

A 60 percent majority said the Fed is paying too much attention to extreme market swings in setting appropriate monetary policy, up from 43 percent last month.

"Passing last meeting was a mistake, but a hike this time would compound the error by signaling that the Fed cares too much about market reaction in setting policy," said John Kattar, of Ardent Asset Advisors.

But not everyone was critical of the Fed chair. Raymond James' Kevin Giddis, for one, said Yellen has enacted the right policies.

"She has faced down her critics but also knows that it won't be long until the committee must act. I give her high marks for her patience," he said.

Many others emphasized the challenges Yellen faces, and said she has done a good job under the circumstances.

"Yellen is faced with the difficult job of stimulating balanced growth in the absence of modestly stimulative fiscal policy," said Constance Hunter, chief economist for KPMG. "Add to this the apparent lack of productivity growth and it is an exceptionally challenging time to be a central banker."

Federal Reserve Board Chairman Janet Yellen
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Federal Reserve Board Chairman Janet Yellen

Wall Street will be closely reading the committee's October statement for clarity regarding the timing for liftoff from near-zero rates. In an abundance of speeches and public appearances, regional Fed presidents and governors have sent mixed messages on the timing of what would be the first rate hike in more than nine years.

According to CNBC's survey, 80 percent of respondents said Fed governors and presidents talk too much, up from 64 percent last month.

"Too much dissonance, too much talking other than the chairman is confusing markets," said Allen Sinai, chief economist at Decision Economics. "The attempt at transparency is counterproductive."

Still, only one-fifth of respondents said Yellen speaks too much, while half said she communicates the right amount regarding her views on monetary policy.