Federal Reserve Chairman Jerome Powell has emphasized the importance of central bank independence and his commitment to bringing down inflation during his first public appearance of the year on Tuesday.
Speaking at an event hosted by Sweden’s central bank, the Sveriges Riksbank, Powell said that without explicit congressional legislation, it would be inappropriate for the Federal Reserve to use its monetary policy or supervisory tools to promote a greener economy or to achieve other climate-based goals.
Powell noted that restoring price stability when inflation is high can require measures that are not popular in the short term, such as raising interest rates to slow the economy. He emphasized that price stability is the bedrock of a healthy economy and provides the public with immeasurable benefits over time.
The Federal Reserve Chairman also said that maintaining the Fed’s independence includes steering clear of issues that are more properly overseen by elected officials. He added that the Fed has only a limited role to play in combating climate change, a stance that puts him at odds with environmental activists who have pushed central banks worldwide to take steps to restrict lending to energy companies.
Overall, Powell’s remarks emphasize the importance of central bank independence and the need to maintain price stability in order to have a healthy economy. He also noted that the Fed has a limited role to play in combating climate change, and that it is up to elected officials to take the necessary steps to promote a greener economy.
Key takeaways:
- Powell emphasized the importance of central bank independence and the need to bring down inflation
- He noted that restoring price stability when inflation is high can require unpopular measures
- The Federal Reserve Chairman also said that the Fed has a limited role to play in combating climate change
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