I doubt that it is done to protect private interests. They are appointed by the president, if the economy turns bad because of a Fed action then it looks bad by the president so then the Fed chair will be axed. So it is mainly from public pressure i.e crying that they need a money van to have...
I would actually agree with this statement. I mean if you look at on average most firms are fundamental with a few only being technical trading firms. The returns for these funds is lower than the average for simply going to the S&P 500 and placing there money there.