, Columnist
The Fed Should Fight Inflation, Not Climate Change
Straying from monetary policy would compromise the central bank’s independence.
What can central banks do?
Photographer: CHRISTOF STACHE/AFPThis article is for subscribers only.
Federal Reserve Chair Jerome Powell is justifiably proud of the central bank’s independence — and refreshingly candid about its boundaries. The Fed, he said last week, “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. … We are not, and will not be, a climate policymaker.”
Powell’s short remarks, made at a symposium of central bankers in Stockholm, address an argument some of the bank’s critics have been making: The Fed uses its independence to fight inflation, so why can’t it also use it to fight climate change?