The US Federal Reserve "will not be a 'climate policymaker,'" Chair Jerome Powell said Tuesday, adding that it would be inappropriate to use the central bank's tools for climate goals.

Speaking at a symposium on central bank independence in Stockholm, Powell said some analysts have raised the idea of incorporating climate change risks in bank supervision.

But Powell stressed that decisions about policies that directly address climate change "should be made by the elected branches of government and thus reflect the public's will as expressed through elections."

"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," he added.

In his speech, Powell also flagged the benefits of insulating monetary policy decisions from political considerations.

He noted that restoring price stability amid soaring inflation "can require measures that are not popular" as Fed policymakers raise interest rates to slow the economy.

The Fed has raised the benchmark lending rate seven times last year as the United States grapples with decades-high inflation.

"The absence of direct political control over our decisions allows us to take these necessary measures without considering short-term political factors," he said.

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Last 8 years warmest on record globally: EU climate monitor
Paris (AFP) Jan 10, 2023
The last eight years were the warmest on record even with the cooling influence of a La Nina weather pattern since 2020, the European Union's climate monitoring service said Tuesday. Average temperatures across 2022 - which saw a cascade of unprecedented natural disasters made more likely and deadly by climate change - make it the fifth warmest year since records began in the 19th century, according to the Copernicus Climate Change Service. Pakistan and northern India were scorched by a two-mo ... read more