Federal Reserve Chairman Jerome Powell dashed the hopes of environmental zealots when he expressed his sentiment that the central bank’s policies should not take into consideration the effects of climate change, slapping down woke colleagues by reiterating that the Fed shouldn’t become a “climate policymaker.”
Powell, who has angered Democrats including Senate Banking Subcommittee on Economic Policy chair Sen. Elizabeth Warren (D-Mass.) over the recent hiking of interest rates to combat rampant inflation, made his remarks during a Tuesday speech from Stockholm, Sweden where he was attending a forum on central bank independence, making it clear that the enforcement of the left’s radical political agenda was a job for politicians and not bankers.
“Restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy. The absence of direct political control over our decisions allows us to take these necessary measures without considering short-term political factors,” the nation’s top banker said in his prepared remarks.
The Fed should “‘stick to our knitting’ and not wander off to pursue perceived social benefits that are not tightly linked to our statutory goals and authorities,” he added. “Taking on new goals, however worthy, without a clear statutory mandate would undermine the case for our independence.”
(Video: YouTube/Bloomberg)
“The Fed has a degree of independence as do other federal bank regulators,” Powell said of the area of bank regulation. “Independence in this area helps ensure that the public can be confident that our supervisory decisions are not influenced by political considerations, and today, some analysts ask whether incorporating into bank supervision the perceived risks associated with climate change is appropriate, wise, and consistent with our existing mandates.”
“Addressing climate change seems likely to require policies that would have significant distributional and other effects on companies, on industries, on regions and on nations,” he said. “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.”
“At the same time, in my view, the Fed does have a narrow but important responsibilities regarding climate related financial risks, these responsibilities are tightly linked to our responsibilities for bank supervision,” he continued. “The public reasonably expects supervisors to require that banks understand and can appropriately manage their material risks including the financial risks of climate change.”
“But without explicit congressional legislation, it would be inappropriate for us to use our monetary policy or supervisory tools, for example, to promote a greener economy or to achieve other climate-based goals,” he added. “We are not, and will not be, a climate policymaker.”
Such legislation is unlikely to come anytime soon now that Republicans have regained control of the House and will be in a position to act as a brake against the radical Green New Deal social engineering of the Biden administration and congressional Democrats who are in lockstep with the extremism of the most shrill elements of the climate change doomsday cult when it comes to their policies.
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