The Fed has a dual mandate to maximize sustainable employment and ensure stable prices, and is also responsible for regulating banks in the United States.

It should ensure that its focus on "traditional risks is not lost or diluted," Fed governor Michelle Bowman told a conference in Texas Friday, according to prepared remarks.

"One example of a supervisory and regulatory distraction is from the Fed's recent focus on climate risk," she said, referring to a Fed pilot climate analysis of six US banking giants designed to see how resilient they were to climate-related financial risks.

The banks, including Goldman Sachs and Wells Fargo, reported having "significant" challenges when estimating the financial risks from climate change because of a lack of good data.

Although the "exploratory" exercise does not have any real-world regulatory consequences for these banks, it nevertheless marks a rare foray into the topic of climate change for the independent US central bank.

"Firms are already required to manage all material risks, and prioritizing climate risk in this way could lead to the misallocation of risk-management resources," Bowman said Friday.