Fed Will Not Be A "Climate Policymaker" According To Chair

The Chair of the U.S. Federal Reserve Board (Fed), Jerome Powell, stated in a speech at the Swedish Central Bank's symposium on January 10 that the Fed is not a "climate policymaker." He stated that it was critical for the U.S. central bank to "[s]tick to [its] knitting" by following its statutory goals and authorities and not expanding its remit to include "other important social issues." Chair Powell went on to explain that "[t]he Fed does have narrow, but important, responsibilities regarding climate-related financial risks" and that "[t]hese responsibilities are tightly linked to our responsibilities for bank supervision." He confirmed that the public expects supervisors to ensure that banks understand and manage risks, including those connected to climate change, but that without legislation from Congress it would be "inappropriate" for the Fed to utilize its powers to influence finance and investment decisions by regulated entities.