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Fed's Powell expects political pushback from rate hikes, rejects climate mandate

Published 01/10/2023, 09:09 AM
Updated 01/10/2023, 09:21 AM
© Reuters

By Geoffrey Smith -- The Federal Reserve is bracing for political resistance as its attempts to bring down inflation hit growth and bolster the ranks of jobless.

"Restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy," Fed Chair Jerome Powell said in prepared opening remarks at a panel discussion in Sweden, where he was attending a conference on central bank independence. The remarks were published in advance on the Fed's website.

However, Powell said that "the benefits of independent monetary policy in the U.S. context are well understood and broadly accepted," and said he was confident of the Fed's ability to take "necessary measures."

Powell made no direct reference in his opening remarks to the level of U.S. interest rates. Speculation has grown since the release of the December Labor Market Report that the Fed could slow the pace of its interest rate hikes again at its next meeting. San Francisco Fed President Mary Daly told an event on Monday that a hike of only 25 basis points could be justified if the economic data continue to be cooperative. The jobs report last Friday showed a slowdown in both employment growth and wage growth.

However, Powell distanced himself from other - mainly European - speakers at the conference in rejecting the inclusion of climate change considerations in its monetary policy.

"Without explicit congressional legislation, it would be inappropriate for us to use our monetary policy or supervisory tools to promote a greener economy or to achieve other climate-based goals," Powell said, repeating the Fed's traditional position. "We are not, and will not be, a climate policymaker."

Latest comments

Just raise it to fifteen bases pints and get it over with. That should drop Core to 3 or even better imo.
Newsflash: The climate changes NATURALLY! Man has ZEEO impact in climate change. Someone tell, Greta!
Maybe its not so clear in the above replies thst both sudes have a valid pt. LOL!
After reading above comments, thought I’d better make clear that both sides having a point was not referenced to comments on this post. LOL
  Not everyone's points are equally valid; not everyone here making a point are experts in climate science.  The wise thing to do is to reject our hubris, and instead accept our non-expertise & rely on the consensus of the scientific community.
the ignorance of some of the commenters here beggars belief. seemingly living their lives with their heads in the sand, frightened to death by little girls from sweden..
Glad he rejects the climate psychosis. These people are the flat earthers of our time. Hard to believe yhe level of psychosis they have reached.
  Weather changing is not in dispute.
 and dumb suckers are born every minute
ignorance is truly bliss
Why in the heck is a reporter asking a fed chairman about climate policy. The fed chairman's only job is inflation has nothing to do with anything else. Terrible reporting if you ask me, sounds like they were just trying to get clicks.
day thay to ecb :/
Not his only job
bcs in europe there is a debate wheater if ecb should buy bonds of greener energy(mainly as i get it) sector companies. debate means we are not doing it but are speaking about it.
Thank God that we have one sane voice to push back on the Climate Nazis.
God? Which one?
From a science denier and believer in sky fairies..phew :(
wow! he must know it's all pie in the sky
Best FED chair ever. Seriously.
bcs he said he doesnt havr mmandate on something? that doesnt mean that it wont change right?
boomer disconnected from reality
next will unexpected rate hike Mr Powell
target ky lag rehe h silver ke
maximum respect powell
this guy is the best
He's doing the right thing... Between 2020 and 2022 we didn't magically output 40% more to GDP, yet the markets were behaving like we did. All that pandemic spending really just helped out one country - China. Everyone just sat at home and spent on Amazon leaving their local economies to completely falter. We're well overdue for a rate hiking cycle, even if its short lived.
you really beleive that powell and fed will push rates much higher? cmon. with china you may ask why rates wont go up, as well with mainland economy.. fed has no way out. inflation is here to stay..
How about finally admitting how much they messed up, and they don't know what are they doing? A useless unnecessary institution, robbing people and countries blind.
so behind the curve it's embarrassing
Democrats must be harassing the Fed governors.
"Powell, now in his fifth year as Fed chair, has put a high priority on building strong relationships with elected officials from both major U.S. parties, but faced criticism from some Republicans for, in their view, allowing the Fed to wander from its core responsibilities into areas like climate change and the economics of race."  -- from another Reuter article
We can read, Tre.
powell is going to be gone soon i can see that coming a mile away.
I wonder what you think will happen.  He can't be fired and everything he said was correct.  It's not the Fed's job to worry about the markets.   They have a mandate from Congress written into law.
No people are mad because you're tone deaf. They think like your transitory insistence you raise rates higher then nessecary despite inflation clearly coming down
So we should buy or sell gold?
buy gold and silver. you'll thank me in a year 👍
Sell do not listen fool.
big rally will come......
central banks should take into consideration the bigger picture. the destruction of our habitat is part of the bigger picture. again the US is trailing behind our European partners
our European partners are being led by the nose
 Well I don't think so. America has never really been one to care about the environment the same way Europeans do. Go watch the documentary Gas Land. Absolutely appalling video on the way people are treated in America as their eco systems, lives and homes are utterly destroyed. Apple thinks it's so special, it needs to continue the "lightning" connector, which in fact is actually now 166x faster than those crappy connectors. I have a billion and one cables for this useless connector, the same way I did for the "Dock" connector two decades ago.  America always will choose profit over the environment any day, and it's really showing.
Nowhere Man Powell. Stands for nothing. Has no opinion. Just wind him up and watch him chatter his teeth. A man without a soul.
Climate change has became a fad and keeps cropping up when totally unrelated to the discussion.
Powell said "should not" take into consideration climate concerns, not "will not"
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