Clarification that I'm one of seven governors on the Federal Reserve Board, not governor of Bank of England.

My view is inflation side of mandate not overly problematic due to measurement quirks, while labor market has been gradually weakening for three years.

Portfolio management services measurement biases inflation up 30-40 basis points; labor market shows increasing difficulty finding jobs and longer unemployment durations.

Economy can bear additional support for labor market from monetary policy.

Oil price spikes from Iran war have spooked markets but monetary policy must be set for 12-18 months out when oil shocks have little effect.

Oil price increases affect headline inflation immediately but don't cause subsequent effects a year out when monetary policy impacts economy.

Classic reasoning why central bank should look through oil shock as Fed has historically done.

Forward inflation expectations 1-3 years out unaffected by oil price moves; in fact many are lower since January FOMC meeting.

Inflation swap market shows zero bleed-through of negative oil supply shock into longer-term inflation expectations.

No wage-price spiral concern because labor market has been gradually cooling with declining wage pressures.

We've had positive supply shocks too: AI increases productive capacity; deregulation reduces production costs.

Deregulation wave over last 15 months could drag inflation by 0.3-0.5% annually for next few years according to Fed research.

Unlike oil, I expect AI and deregulation to have persistent disinflationary effects.

Raised headline inflation projection to 2.7% due to oil shock but policy shouldn't respond as effects are upfront.

Oil moving higher now has very little inflationary consequence 12-18 months out; all inflation happens upfront.

Economy might be weaker 12-18 months out as dollars spent on gas aren't spent elsewhere, putting upward pressure on unemployment.

Boosted policy rate projection by half percent due to inflation data between December and March, putting me at about neutral.

Neutral policy rate probably about 2.5-2.75%; we're about a percentage point above that now.

Appropriate over course of year to get back to neutral; economy doesn't need policy slamming on gas like 2021-22 but also doesn't need to be held back.

Right now policy is modestly restrictive and holding economy back, inconsistent with macroeconomic backdrop.

AI productivity boom unambiguously pushes neutral rate higher, but countervailing factors weigh on it.

Population growth shocks (massive spike up then down) and improving fiscal deficit (declining borrowing) weigh on neutral rate.

My view of neutral rate is toward bottom of range of colleagues' views but not outside range.

'Running it hot' assumes constant supply; deregulation, AI, capital deepening increase economy's horsepower so demand can grow faster without inflation.

If you push supply side out and supply grows quickly, demand can grow quickly too without being inflationary.

Supply shocks matter based on whether they push out actual GDP or potential GDP by more or less.

Deregulation likely increases potential GDP more than actual GDP (e.g., running smokestack more hours without new investment). AI effect less clear due to investment demand.

Financial innovation important for allocating capital efficiently; skinny master accounts for stablecoins important step for innovation.

Fed received many comments on access and balance caps; excited for Governor Waller to push this forward.

Stablecoins add less for savings in places with open capital markets but facilitate digital payments; most growth will come from places with capital controls or poor banking access.

Large pools of savings currently unable to access dollar system could use stablecoins; like rideshare apps breaking taxi monopolies.

Huge inflows into dollar savings via stablecoins could weigh on neutral rate like global savings glut of late 1990s/early 2000s.

Optimistic stablecoin growth projections could be half as big as Bernanke's global savings glut, powerful force weighing on interest rates.

Tokenized deposits seem like improvement on existing bank services but haven't studied extensively.

Innovation drives long-run human prosperity; respond to Fed requests for information to help make regulations more efficient.

Fed follows Administrative Procedure Act and seeks comments from industry to know if regulations need adjustment.