Federal Reserve Withdraws From NGFS Three Days Before Trump's Inauguration, Citing Scope Beyond Mandate

Jan 17, 2025, 08:54 PM

The Federal Reserve announced on Friday its withdrawal from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), a global coalition focused on addressing climate-related financial risks. The Fed cited the group's expanding scope as exceeding its statutory mandate. The decision comes just three days before President-elect Donald Trump, a vocal critic of government-led climate change policies, is set to take office. The NGFS, established in 2017, aims to assist central banks and financial supervisors in integrating climate risks into their monetary and regulatory frameworks. The Federal Reserve joined the NGFS in 2020 under Chair Jerome Powell, who has maintained that the Fed's role in addressing climate change is limited and that direct action on climate change falls outside the Fed's responsibilities. Five of the Fed's governors voted in favor of leaving the NGFS, while Governors Michael Barr and Adriana Kugler abstained.