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The Fed deals with race and climate issues



in history Unsolvable problem Just like climate change and race, as the Fed moves further into uncharted territory, it is now on the Fed’s agenda.

Why it matters: How one of the most influential economies in the world guides policies and supervises national banks has had an impact.

How is this going: The Federal Reserve recently set up two committees to study the impact of climate change on the economy and banks-a sign that previous initiatives in this area are receiving some attention.

Between lines: It may feel small, especially for issues that have threatened and plagued the country for years.

  • However, for an organization where few organizations talk about these issues publicly, this is a big problem, let alone involve them in economic considerations.

About the climate: The Fed lags behind its global counterparts that are less politicized in climate change.

  • Last year, the Federal Reserve became the last institution to formally join the Central Bank’s Climate Network since 201
    7.
  • another example: The Bank of England will incorporate climate factors into its stress test on banks. Fed Chairman Powell said this is in the “early” stage of consideration.

In the competition: Fed officials hinted that the national unemployment rate is not the only unemployment indicator they have to consider when measuring economic health.

  • The black unemployment rate-which tends to fall much more slowly-may also be a factor.

I’m going to… overturn the view that if the sum [unemployment rate] At a certain moment, but some of the target groups are still in serious predicament.

—Raphael Bostic, the only black leader of the Federal Reserve Bank at the beginning of this month, and a voting member of the Federal Reserve’s policy.

flashback: In 2019, Powell began to call for the importance of maintaining economic prosperity so that ethnic minorities and low-income workers can profit from it.

  • Powell said that the Fed’s pandemic-era policies “absolutely” will not exacerbate income inequality in the United States.
  • Yes, but: A study by the New York Federal Reserve this year found that loose monetary policy benefits the rich more than low-income people, which exacerbates inequality.

note: As the Fed’s call for the importance of diversification grows higher, it is trying to resolve the lack of diversification in its ranks.

Big problem: Whether the ocean’s changes in climate and race are short-lived or lasting.

  • Adele Morris, a Brookings Institution researcher, told Axios: “As long as the Federal Reserve is ruled by people of prestige, I think many of these changes will continue to exist.”

What to see: Resistance from the Republican Party.

  • Newest: Senator Pat Toomey, the top Republican of the powerful Senate Banking Committee, this week warned the Fed’s regional banks of “slow tasks” and called on them to conduct research on issues such as climate change and racial justice.

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