May 8, 2019

How Jerome Powell's Fed thinks about climate change

Fed Chair Jerome Powell. Photo: Mark Wilson/Getty Images

Federal Reserve Chair Jerome Powell told lawmakers the Fed is working to prepare financial institutions for severe weather events, even though climate is more broadly something "entrusted to other agencies."

Why it matters: Powell's April 18 letter, made public yesterday, provides a closer look than his previous public comments at how the Fed views the financial risks of extreme weather events that global warming is making more intense.

  • Powell notes that severe weather can not only "devastate" local economies, including banks, but also "temporarily affect national economic output and employment."
  • His letter explains how the Fed's risk framework for monitoring financial system stability sees episodes of extreme weather as potential shocks that can have ripple effects beyond straining insurance companies.

But, but, but: The letter is more moderate than a recent report by officials at the San Francisco Fed, and the calls to action of major central banks.

Our thought bubble: Via Axios' Dion Rabouin, Powell has been the perhaps the most political Fed chair ever. He's taken the view that the Fed is fighting for its survival. A big part of that fight is avoiding public confrontation with President Trump, who has staunchly opposed action on climate change, whenever possible.

What they're saying: Democratic Sen. Brian Schatz, who led a January inquiry to the Fed, the FDIC and the Office of the Comptroller of the Currency with 19 colleagues, attacked the agencies' responses via Twitter, calling them "garbage."

  • "[A]ccording to the Fed, severe weather isn't new and climate change isn't their responsibility," he said. "The American agencies that oversee the financial system have decided to ignore climate change."

Go deeper: The Fed outlines potential economic fallout from global warming

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Trump acknowledges lists of disloyal government officials to oust

Photo: Mandel Ngan/AFP via Getty Images

President Trump on Monday acknowledged the existence of assembled lists of government officials that his administration plans to oust and replace with trusted pro-Trump people, which were first reported by Axios' Jonathan Swan.

What he's saying: “I don’t think it's a big problem. I don’t think it's very many people,” Trump said during a press conference in India, adding he wants “people who are good for the country, loyal to the country.”

Coronavirus only part of the story behind the Dow’s drop

Photo: Andrew Burton/Getty Images

As someone has certainly told you by now, the Dow fell by more than 1,000 points yesterday, its worst day in more than two years, erasing all of 2020's gains. Most news headlines assert that the stock market's momentum was finally broken by "coronavirus fears," but that's not the full story.

What's happening: The novel coronavirus has been infecting and killing scores of people for close to a month and, depending on the day, the market has sold off or risen to record highs.

Bernie's historic Jewish fight

Illustration: Sarah Grillo/Axios

Sen. Bernie Sanders would be the first Jewish presidential nominee of a major American political party — but that history-making possibility is being overshadowed by his conflicts with America's Jewish leaders and Israel's leadership.

The big picture: That's partly because we're all focusing on the implications of Democrats nominating a self-described democratic socialist. It's also because a candidate's religion no longer seems to matter as much to voters or the media, making the potential milestone of a Jewish nominee more of a non-event.