The Federal Reserve failed to prioritize its core mission to combat inflation while embracing the Biden administration’s green energy agenda, economic and energy policy experts told the Daily Caller News Foundation. [emphasis, links added]
Under Fed Chairman Jerome Powell’s leadership, the Fed joined a global climate change group and took other steps to align with President Joe Biden’s climate agenda while failing to effectively manage primary responsibilities, according to economists and energy policy experts.
Though Powell once told Congress that the Fed is not made of “climate policymakers,” Biden later said that Powell “made clear to him” that the Fed would work to mitigate economic climate risks while inflation reached a 40-year high, according to multiple reports and experts who spoke with the DCNF.
“Right after the most recent presidential election, the Federal Reserve gave up on the whole green energy agenda,” EJ Antoni, chief economist at the Heritage Foundation, told the DCNF. “The Fed ultimately came to the conclusion [under Biden] that lending to fossil fuel projects involved a new level of risk — not because of repayment risk, but because of climate change.”
Antoni argued that upon Trump’s return to the Oval Office, the Fed reversed its green doctrine that was aligned with “absolutely ludicrous” Biden-era energy policy.
The Fed became a member of the Network of Central Banks and Supervisors for Greening the Financial System (NGFS) in December 2020. The NGFS supports a green energy transition and seeks to inform banks on how to integrate climate risks into banking practices.
The Fed announced its exit from the NGFS on January 17, right before Trump returned to office.
“They very quickly realized that there was a new sheriff in town, and that they didn’t need to try to appease the far radical left anymore, especially on energy,” Antoni said.
Trump has recently criticized Powell, prompting rumors that Trump may fire him. Trump later said in an interview that he will “most likely” not fire Powell because doing so would be “highly disruptive,” and Powell is reportedly not planning to step down before the end of his term in May 2026, according to Reuters.
“You know what? People aren’t able to buy a house because this guy is a numbskull,” Trump said of Powell, according to Reuters. “I think he’s done a bad job, but he’s going to be out pretty soon anyway. In eight months, he’ll be out.”
Inflation was at 1.6% when Powell said in February 2021 that the Fed cannot decide how climate change will be addressed as it isn’t comprised of “climate policymakers,” according to RealClearPolitics.
When Biden assured Americans in November 2021 that Powell was committed to tackling climate change, inflation had already reached 6.8% and was climbing toward a 40-year high of 9.1%, according to the outlet.
Powell endorsed the Financial Stability Oversight Council’s (FSOC) Report on Climate-Related Financial Risk in October 2021, stating that “climate change poses significant challenges for the global economy and the financial system” and that “the public rightly expects us to work to ensure the financial system is resilient to climate-related financial risks.”
The report identifies climate change as a financial risk to the U.S. economy and recommends that council members take action on climate change data.
“Chair Powell has been clear that the Federal Reserve is not a climate policymaker and that those decisions must be made by the elected branches of government,” a spokesperson for the Fed told the DCNF.
Though the Fed and Powell have consistently argued that the agency does not craft regulatory policy, Antoni argued that the Fed holds influence beyond its ability to curb inflation.
“People really underestimate the regulatory power of the Federal Reserve,” Antoni said. “The Fed will essentially force people in the financial industry to make choices based on the regulatory consequences.”
Top image via Forbes Breaking News/YouTube screencap
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