Brookfield’s Mark Carney on the firm’s new $15 billion bet on the

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Brookfield Asset Management announced last week that it raised a record $15 billion for its inaugural Global Transition Fund. This marks the world’s largest private fund dedicated to the net zero transition, signaling that investors are still committed to establishing cleaner portfolios. 

However, some blame the trend toward ESG-investing for high energy inflation. Critics say the focus on clean energy has curbed investment in fossil fuels, which may have otherwise helped boost supply. 

Mark Carney, co-head of Brookfield’s Global Transition Fund, says he does not subscribe to this critique. Carney sat down with CNBC’s Delivering Alpha newsletter at last week’s SuperReturn International conference in Berlin where he explained what’s driving inflation in gas prices and energy costs and weighed in on the state of U.S. monetary policy. 

 (The below has been edited for length and clarity. See above for full video.)

Leslie Picker: I want to pick your brain on kind of your central banker – if you can put that hat on for me, because there are so many crosscurrents right now. And I want to just first get your take on the US specifically, because that’s where the bulk of our audience is. Is a soft planning still on the table? Or do you think the hard decisions need to be made, and it likely may mean some more pain ahead? 

Mark Carney: It’s a very narrow path in order for the U.S. economy to grow all the way through this. Unemployment has to increase. Financial conditions have already tightened a fair bit, I think they’re going to tighten a bit more, as well. And look, there’s also some pretty big headwinds from the world. China’s effectively in recession, or here in Europe, they’re on the cusp of a negative quarter because of the war and other factors. So, the U.S. economy is strong, it’s robust and flexible, the households are flexible, lots of positives here. But in order to thread the needle, it’s going to be tough.

Picker: Do you think 75 basis points is enough?

Carney: It’s certainly not enough to bring inflation back down and the economy back into balance, which is why what they imply about where policy is going, not just at the end of the year, but where it needs to rest in the medium term is going to be important.

Picker: Do you think that the Fed has lost the faith of investors, that investors now see them as being behind the curve in getting this under control?

Carney: I think the Fed itself and Chair Powell has acknowledged that, maybe they should have started earlier, recognizing that inflation wasn’t transitory. Those are all different ways that we can call it behind the curtain, they’ve acknowledged that. I think what the Fed is looking to do, and where they will retain investor support, is if it’s clear that they’re going to get a handle on inflation, they’re going to get ahead of this, that they don’t think that they can bring inflation down to target by just small…