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Fed’s Powell Differs With European Peers on Climate Policy

  • Powell doesn’t directly factor climate change into policy
  • Must account for climate change when gauging CPI, Lagarde says
Powell And Mnuchin Testify Before Senate Banking Committee

Photographer: Al Drago/The New York Times/Bloomberg

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Federal Reserve Chair Jerome Powell’s narrow approach on climate change was challenged by European counterparts who contradicted his insistence it was not a primary factor in making monetary policy.

“Anything that can affect the outlook for the economy can, in principle, affect monetary policy. So climate change would certainly qualify for that,” Powell said Friday during a virtual conference on the role of finance in combating climate change. “I would say, though, that today, climate change is not something that we directly consider in setting monetary policy.”