Fed Chair Powell: Bank won't be 'climate policymaker,' 'inappropriate' to promote greener economy

Federal Reserve Chairman Jerome Powell says the central bank will not make policies based on addressing climate change and doing so would be "inappropriate."

In a speech Tuesday at Symposium on Central Bank Independence, in Sweden, Powell acknowledged that the public expects banks to be required to manage their financial risks, including those associated with climate change. 

"But 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. "We are not, and will not be, a 'climate policymaker.'"

The Fed is able to raise and cut interest rates without approval from Congress or the White House. The bank's main purpose is to ensure stable prices and maximum employment.

"Taking on new goals, however worthy, without a clear statutory mandate would undermine the case for our independence," Powell said.

Progressive lawmakers and climate activists have argued that the Fed should do more to fight for social justice and against climate change.

Powell's remarks come as many companies, and even the Labor Department, have supported investments in so-called Environmental, Social and Governance initiatives.