Fed Exits Climate Network Amid US Policy Shift

The Federal Reserve has announced its withdrawal from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), citing that the group's broadened scope extends beyond the Fed's statutory mandate. This move, supported by five of the seven Fed governors, including Chair Jerome Powell, follows recent criticism from Republicans and marks a significant shift as President-elect Trump prepares to take office. The NGFS was established in 2017 to help integrate climate risks into monetary policies, but the Fed's role in addressing climate change has been described as limited by Powell. The decision underscores a broader pivot in U.S. policy, as the Fed initially joined the NGFS in 2020 under growing pressure for financial regulators to assess climate-related financial risks. The exit aligns with recent actions by major banks withdrawing from climate agreements, indicating a changing landscape in climate policy engagement.