The comments were part of a larger speech on the importance of an apolitical Fed.
Federal Reserve chairman Jerome Powell at a conference in Stockholm, Sweden on Tuesday. Photo: Claudio Bresciani/TT News Agency/AFP via Getty Imagessaid in a speech on Tuesday the central bank is not a "climate policymaker," though acknowledged the Fed has a duty to ensure banks understand the financial risks associated with climate change.: How and if the Fed incorporates climate change initiatives into policymaking will continue to be a political flashpoint in the coming year.
Powell said the Fed shouldn't wade into issues that weren't directly associated with the two jobs assigned to it by Congress: price stability and full employment. Doing so, Powell said, would "undermine the case for our independence." "We 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," Powell said, later adding the Fed should "resist the temptation to broaden our scope to address other important social issues of the day."The Fed is set to face plenty of blowback from Congress related to how its aggressive rate hikes have impacted the economy, as well as the still-rapid pace of price increases.
But on questions related to climate change and other social issues, Powell speech offers something of a preview of how he is set to respond.
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