Press conference exchange between MICHAEL MCKEE and Fed Chair Jerome Powell:

user: Michael McKee from Bloomberg Radio and Television. The Fed’s been criticized recently by a former Governor for what he calls “mission creep”—you take on more problems, use more tools, and then end up building tools to deal with the fallout of those tools, which then makes it a given that you will act more aggressively in the future. Is that a fair critique, and is that something you would be looking at in your framework review?

assistant: Sorry, say that critique again.

user: That the Fed has been involved in mission creep—gets involved in using too many new tools to deal with problems and to go too far. Is that something that—the critique was based around the fact that you did QE and QE and QE and—

assistant: Oh, okay. Sure.

user: —and went beyond the narrow confines of your mandate.

assistant: So—well, I mean, there are a couple—that’s not really beyond the confines of our mandate. I—look, I would say this: We—you know, we did things—essentially, we were on an emergency footing for a couple of years in the pandemic, and it’s very fair and very welcome for people to look back over what we did and say, “Hey, you could have done this better and different.” And one thing we hear a lot is, we could have explained the QE a little better. We did think we were explaining it in real time. I completely accept the, the thought that we could have explained it better. There’s a lot of thinking that we went on too long with QE. I can tell you that the reason we did was, we were—we were concerned that we didn’t want a tightening of—a sharp tightening in financial conditions at a time when we thought the economy was still vulnerable. And so we did hold on for a long time to QE. And we, of course, tapered and everything. And then we immediately went into QT, and, you know, we’ve—we’re down a couple of trillion. But I get the—that, you know, we, we certainly, with the benefit of hindsight, could have tapered earlier or faster. That’s absolutely right. But this is all very welcome. You know, it’s, it’s—you know, we knew, doing this in real time, that we weren’t going to get it perfect. And those kind of—those kind of, you know, after-action looks are essential. And we’re doing the same thing in—you know, in our review, so—on some issues.

user: There—the other part of that critique is that you’ve taken on topics that are outside of the mandate, such as climate change and trying to ensure that certain groups are benefited by your economic policies in terms of employment, et cetera.

assistant: So, okay, on climate, you’ve heard me say over and over again that we will not be climate policymakers and that our role on climate is a very, very narrow one. And I think—I think that’s what we’ve done. We’ve done really very little on climate. You can say that was—that little bit that we’ve done was too much. But I wouldn’t want to give any impression that, that, you know, we take—that we’ve taken climate in and it’s something that we’re spending a lot of time and energy on. We’re not. We have very, very narrow things. We did one thing, one guidance for the banks, and then we did one—a one-time stress analysis, climate stress analysis, and that’s it. And, you know, we dropped out of the Network for Greening the Financial System. So we didn’t do much on climate, but—and I do think, and I’ve said this publicly several times, I think it’s, it’s a real danger for us to try to take on a mandate like that, which is very narrow application to our work. And, you know, the risk is, if you—if you go for things that are really not on your mandate, you know, then why are you independent? You know, I think that’s a very fair question. And I do think we’ve done a whole lot less on climate than some people seem to think we did. Anyway, that’s what I think.

user: Should you have taken on the question of bringing unemployment rates down for specific categories?

assistant: We didn’t do that. You know, we said—what we said was that we never targeted any unemployment rate for individual racial or demographic groups. What we said was that maximum employment was a broad and inclusive goal. And I think what we meant by that was, we’re going to consider the totality of the country as we look at our maximum- employment goal. Of course, we were never going to target on any individual group with that, but I think some people, you know, wanted to hear it that way. But that’s not at all what we meant. But—so that’s just not a correct reading of our—but I can see how, you know, maybe people found that confusing, and, you know, we have to take that into consideration.