That’s why we must first gain a clearer understanding of how far climate change and protective measures affect the economy and the financial system. Both climate change and the transition to a less carbon-intensive economy may entail risks not only for enterprises in the real economy, but also for the financial sector.
Specifically, the Federal Open Market Committee (FOMC)—the group at the Fed responsible for determining monetary policy—has announced that our goal is to keep inflation around 2 percent over time. The maximum employment part of our dual mandate is straightforward: The Congress has directed us to achieve the highest level of employment—and thus the lowest level of unemployment—that is consistent with price stability.