Last week, Fed Chair Jerome Powell held his first press conference under President Trump’s second term. Powell swiftly addressed the topic of Trump in the Q&A Session, stating:
I’m not going to have any response or comment whatsoever on what the President said. It’s not appropriate for me to do so.
Powell followed up, reiterating that he has had “no contact” with President Trump.
A reporter from Reuters asked about a 2021 central bank conference, quoting Powell who said:
… throughout my career in both public and private sectors, I’ve seen the best and most successful organizations are all from the ones that have a strong and persistent commitment to diversity and inclusion. These organizations consistently attract the best talent by investing in and retaining a world-class workforce.
It would have been better if he cited specific organizations. Without specifics, it’s just a vague talking point used to support the political ideology of diversity, inclusion, and equity.
The reporter then asked if Powell still believes this, asking if the Fed will remain “consistent with the recent executive order prohibiting diversity and inclusion efforts?”
Powell remarked:
So, let me say, yes, in answer to your first question. But, to the second question I’m going to say this, we are, like others, we’re reviewing the orders and the associated details as they are made available, and as has been our practice over many administrations, we are working to align our policies with the executive orders as appropriate and consistent with applicable law.
Which seems to be a roundabout way of saying he will comply with the executive order.
Along these lines, and the new cultural policies the Trump administration has signed into law, Powell was asked about a lesser publicly known announcement that took place on January 17:
The Federal Reserve Board on Friday announced it has withdrawn from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS).
According to its website, the NGF was:
… launched at the Paris One Planet Summit on 12 December 2017, is a group of Central Banks and Supervisors willing, on a voluntary basis, to share best practices and contribute to the development of environment and climate risk management in the financial sector and to mobilize mainstream finance to support the transition toward a sustainable economy.
Essentially, it sounds like another supranational organization, comprised of a collective of central banks worldwide, aimed at planning and coordinating eco-friendly, or green initiatives.
The Fed withdrew from the NGF only several days prior to Trump taking office, as Powell explained his reasoning:
But it was really not driven by politics, it was driven by kind of the disconnect between the work of the NGFS and our mandate. Other central banks have different mandates, and belong to the NGFS, we have no criticism of them, but it just isn’t, it’s not right for the Fed.
Whether this counts as a win for Trump, a pre-emptive move by Powell, or an idea Powell genuinely thought was best, we’ll never know.
But it sounds like another bullet was dodged, given that history consistently demonstrates that centrally coordinated economic planning, especially central banking, has often been detrimental to liberty, freedom, and the purchasing power of the US dollar.
