Fed Leaves Green Blob

Move signals return to historic focus on protecting value of the currency

The Federal Reserve has announced it was withdrawing from the Green Blob - otherwise known as the Network of Central Banks and Supervisors for Greening the Financial System (NGFS). The US central bank said ‘the work of the NGFS has increasingly broadened in scope, covering a wider range of issues that are outside of the Board's statutory mandate.’ The Fed had decided a central bank cannot fix all ills in the world.

The announcement pre-empted president Trump’s withdrawal from the Paris Agreement on Climate Change by several days. Is this a way for the Fed to genuflect to the new president? Possibly - or probably. It is also a clear retreat from globalised liberal dominance of the most important monetary authority in the world. And signals a return of the historic function of the Federal Reserve - the guardianship of the value of the dollar.

It is a good start. There are plenty of other adjustments which would help. Such as the commitment to dismantle ALL non-conventional policies and recognise the damage and inequality they helped create.

Others may quickly follow suit, because the Fed leads everyone - though I’d expect the ECB to continue to profess its ‘green virtue’ for some time. Let’s hope for a swift emulation from the Bank of England, which overseas an economy in dire need of adult focus.

Photo by Oleksandr Kuzmin on Unsplash