Toomey Calls Fed’s Climate and Race Research ‘Political’ Mission Creep

(Bloomberg) -- Republican Senator Patrick Toomey said the San Francisco Federal Reserve’s research into topics including climate change and racial justice is “politically charged” and could result in “mission creep” from the independent agency into policy matters usually left to elected officials.

“Several Federal Reserve banks, including the FRBSF, have increasingly been engaged in research on social-policy topics reflective of the political and normative leanings of unelected Federal Reserve Bank officials,” Toomey wrote in a letter Monday. “This approach has inserted the Federal Reserve into the emotionally charged political arena -- a place where the Federal Reserve seldom has ventured, and for good reason.”

Toomey, the ranking member of the Senate Banking Committee, addressed the letter to San Francisco Fed President Mary Daly, asking for records pertaining to the bank’s seminar on climate economics, racial-justice research and its research and community development expenses from the last 10 years.

The San Francisco Fed said it had received the letter and looked forward to discussing the contents with Toomey’s office.

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The San Francisco Fed and its 11 regional counterparts have together hosted a series of virtual conferences on the impacts of racism in the economy. Many of the reserve banks have also been researching the potential consequences of climate change for the economy. The Fed’s board of governors voted unanimously last year to join the Network of Central Banks and Supervisors for Greening of the Financial System, a group that aims to study the effects of climate change on financial systems.

Fed Chair Jerome Powell was asked several times about the Fed’s research into climate change in hearings before Congress last week. He said the Fed has a responsibility to look into how it may impact financial institutions, and that climate change will likely have a significant impact on the U.S. economy.

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