Thursday, 12 January 2023

What Adrian Orr should learn from Jerome Powell: "Stick to the knitting"

"The case for monetary policy independence lies in the benefits of insulating monetary policy decisions from short-term political considerations. Price stability is the bedrock of a healthy economy and provides the public with immeasurable benefits over time. But restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy....
    "It is essential that we stick to our statutory goals and authorities, and that we resist the temptation to broaden our scope to address other important social issues of the day. Taking on new goals, however worthy, without a clear statutory mandate would undermine the case for our independence."
~ US Federal Reserve Chairman Jerome Powell, quoted by The Grumpy Economist in his post 'Cheers for Powell' [emphasis mine]

1 comment:

Anonymous said...

Powell also said:
...Decisions about policies to directly address climate change should be made by the elected branches of government and thus reflect the public's will as expressed through elections.

... without explicit congressional legislation, it would be inappropriate for us to use our monetary policy or supervisory tools to promote a greener economy or to achieve other climate-based goals. We are not, and will not be, a "climate policymaker."

And Grant Robertson renewed our illustrious governor’s term for another 5yrs… Orrsome (Yeah, right!) 🙄