Jerome Powell says Federal Reserve is ‘not, and will not be, a ‘climate policymaker’

Federal Reserve Chair Jerome Powell delivered a speech at a forum hosted by Sweden’s Riksbank.

He discussed how the U.S. central bank is politically independent and how important this really is to grapple with inflation.

Of course, this is hogwash since the Fed is perhaps one of the most political institutions in the United States.

But Powell made remarked that the Eccles Building will not be a “climate policymaker.”

Here is what he said on the subject (emphasis ours):

“It is essential that we stick to our statutory goals and authorities, and that we resist the temptation to broaden our scope to address other important social issues of the day. Taking on new goals, however worthy, without a clear statutory mandate would undermine the case for our independence.

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Addressing climate change seems likely to require policies that would have significant distributional and other effects on companies, industries, regions, and nations. Decisions about policies to directly address climate change should be made by the elected branches of government and thus reflect the public’s will as expressed through elections.

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But without explicit congressional legislation, it would be inappropriate for us to use our monetary policy or supervisory tools to promote a greener economy or to achieve other climate-based goals. We are not, and will not be, a ‘climate policymaker.'”

Interestingly enough, the Fed will be running a climate stress test with six of the nation’s largest banks to determine if they can withstand a significant climate event.