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Fed can no longer ignore potential economic ‘shocks’ of climate change: Brainard

“Climate change is just the kind of “shock” to the economy that the Federal Reserve can no longer ignore, Fed Governor Lael Brainard said Friday” writes Rachel Koning Beals for marketwatch.com. “To the extent that climate change and the associated policy responses affect productivity and long-run economic growth, there may be implications for the long-run neutral level of the real interest rate, which is a key consideration in monetary policy,” Brainard said, at a first-of-its-kind Fed summit to focus on the economic and policy affects of climate change, hosted by the San Francisco Fed. Brainard said the Fed is monitoring how climate change effects the banking system’s operations, the impact of climate policies on the energy sector and how weather affects the economy.
 
Source: marketwatch.com



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