When Kristalina Georgieva had to choose a panel for her debut as managing director of the International Monetary Fund at the organization’s fall meeting, the choice was easy: the panel on central banking and climate change. Climate change is the overriding preoccupation of our moment. Everyone wants to be part of the act. And central bankers, too, are rallying to the cause. In the world of monetary policy, however, this new preoccupation is cross-cut by another debate: how to react to a world of low inflation and negative interest rates. Central bankers are arguing about interest rate normalization, pumping liquidity into money markets, or even resorting to a new phase of quantitative easing (QE).
The United States occupies an eccentric position in these debates. Despite fears of a slowdown, the U.S. economy is actually ticking along at a reasonable pace. Earlier in the year, the Federal Reserve was still expected to raise rates. Its problem is that it faces open intimidation from U.S. President Donald Trump. Trump’s White House also quashes any serious discussion of climate change. So Washington played host to IMF’s green finance roadshow this fall, but American voices were largely silent.
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