US Federal Reserve Changes its Approach; New Reports on Climate Change and Opportunity Zones

The Federal Reserve last week announced it was ending its longstanding practice of preemptively hiking interest rates to stave off inflation. Chairman Jerome Powell said the central bank would instead focus on maintaining low levels of unemployment, even if it comes at the expense of higher prices for consumers. The Fed is expected to maintain its benchmark rate – which was cut twice back in March in response to the COVID-19 pandemic – at near-zero percent levels for the foreseeable future. 

Over on Capitol Hill, Senate Democrats are out with a new report. Called The Case for Climate Action, it recommends trillions of dollars in investments to cut greenhouse gas emissions and reach net-zero emissions by 2050. In terms of buildings in the commercial and industrial space, it highlights options for “decarbonizing everything,” but the plan is far less specific than the one released in July by House Democrats. Sen. Brian Schatz (D-HI), who chairs the select committee that published the paper, said many of the recommendations are intentionally open-ended in order to “maintain flexibility going into the next Congress.” 

The White House is also out with its own report, demonstrating the positive impact of the Opportunity Zone program. It estimates that the program, created as part of the 2017 tax bill, has attracted an estimated $75 billion in capital through 2019. President Donald Trump issued an executive order last week that directs federal agencies to prioritize these distressed and underserved communities when considering where to relocate their offices. 

Finally, a coalition of states are taking aim at the Trump administration’s proposed overhaul of the National Environmental Policy Act (NEPA). A lawsuit filed in California argues that the changes “undermine NEPA’s goals of environmental protection, public participation, and informed decision making.” The rule changes, which would expedite the permitting process for federally-funded projects, go into effect Sept. 12.