recap/history/1775275709956-d01H-T3-frg.json

{"id":"1775275709956-d01H-T3-frg","videoId":"d01H-T3-frg","url":"https://www.youtube.com/watch?v=d01H-T3-frg","title":"Fed Governor Miran on Why Inflation Fears Are Overstated","type":"youtube","topicCount":9,"segmentCount":97,"createdAt":"2026-04-04T04:08:29.956Z","uploadDate":"20260401","chunks":[{"title":"Cold Open & Podcast Disclaimer","summary":"A preview of Governor Miran's remarks on monetary policy, inflation, and supply shocks, followed by a standard podcast disclaimer from the narrator.","entries":[{"text":"Governor Miran: Oil moving higher now has very little inflationary consequence 12 to 18 months out, all the inflation happens up front. And so that's part of why a central bank should look through an oil shock as the Federal Reserve has historically done.","offset":0,"duration":11},{"text":"Governor Miran: Forward inflation expectations a year out, two years out, three years out are all pretty much unaffected by what's been going on and in fact a lot of them are lower since the FOMC met in January.","offset":11,"duration":10},{"text":"Governor Miran: My view is that the economy can bear additional support for the labor market from monetary policy. With the labor market very gradually cooling and declining wage pressures, you just are not going to get a wage price spiral that a central bank would normally respond to.","offset":21,"duration":13},{"text":"Governor Miran: When you start to say something like running it hot, it's wildly imprecise because it's a statement that sort of assumes that supply is constant, that you can't increase the horsepower of the car.","offset":34,"duration":9},{"text":"Governor Miran: I don't think the economy needs monetary policy to be slamming on the gas and accelerating the economy like it was in 2021 or 2022, but I also don't think it needs to be holding the economy back. And right now it is modestly restrictive and it is holding the economy back and I don't think that's consistent with the macroeconomic backdrop.","offset":43,"duration":16},{"text":"Governor Miran: What matters when you think about shocks to the supply side, whether they're AI, oil, regulation, no matter what the shock is what matters when you think about this is-","offset":59,"duration":11},{"text":"Narrator: Nothing said on Forward Guidance is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only, and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in the companies, funds, or projects discussed. As always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research.","offset":70,"duration":27}],"startTime":0},{"title":"FOMC Dissent & Monetary Framework","summary":"After being introduced, Governor Miran explains his rationale for dissenting at the recent FOMC meeting. He argues that inflation measurement quirks and a cooling labor market justify support for a rate cut, and that the Fed should look past short-term oil shocks.","entries":[{"text":"Host: Governor Miran, great to have you to the Digital Summit. Welcome.","offset":97,"duration":9},{"text":"Governor Miran: Thanks for having me and let me just clarify that I'm one member of a Board of seven governors, there are seven of us. I'm not a governor in the sense of a governor of the Bank of England or something like that.","offset":106,"duration":10},{"text":"Host: That's a good clear, hey Governor. Governor Miran, would love to just start by unpacking the most recent FOMC meeting that occurred last week. You dissented in support of a 25 basis rate cut, so I'd just love for you to unpack your current framework and why you dissented there.","offset":116,"duration":16},{"text":"Governor Miran: Sure, thanks. Look, you know at the Federal Reserve we have a dual mandate. We are tasked by Congress with paying attention to inflation, stable prices, and to the labor market. My view is that the inflation side of the mandate has, despite high measured inflation, has not been so problematic.","offset":132,"duration":17},{"text":"Governor Miran: Because a lot of the inflation excess over target has been as a result of some quirks of measurement of things like portfolio management services, which is basically just the stock market going up, biasing the way we measure inflation by 30 to 40 basis points.","offset":149,"duration":15},{"text":"Governor Miran: Once you correct for those things, I do not view inflation as being overly problematic, whereas the labor market has been on a very gradual trend of weakening over the course of the last three years. That trend has been in place, it's been continual, you see it in increasing difficulty of finding jobs for new entrants to the labor market.","offset":164,"duration":16},{"text":"Governor Miran: You see it in increasing length of time and people spend between jobs during unemployment. And so my view is that the economy can bear additional support for the labor market from monetary policy. Now a lot of what's been going on in the last few weeks is of course been tied to the war in Iran.","offset":180,"duration":17},{"text":"Governor Miran: And I think what's going on in oil prices has spooked a lot of people. Uh, you know, and I understand from a trading perspective, from a markets perspective, things whip around wildly in both directions, you get headline ping-pong and that pushes markets. And if you have leveraged positions, that can feel very, uh, you know, sort of very intense.","offset":197,"duration":16},{"text":"Governor Miran: But from a monetary policy perspective, we have to make policy for 12 to 18 months from now because there are big lags with which monetary policy hits the economy. If we adjust interest rates, it doesn't feed through into actual economic growth into actual unemployment and inflation for at least a year.","offset":213,"duration":19},{"text":"Governor Miran: So we need to set policy for a year, to a year and a half out. And the way that changes in oil prices affect the economy is actually much faster than that. When you get a spike up in oil prices, when you get a move higher in oil from something like what's going on in Iran, the oil price goes up immediately and headline inflation goes up a lot in the short term.","offset":232,"duration":20},{"text":"Governor Miran: But as you look a year, two year, a year and a half out, it's very unlikely that that causes subsequent effects that are affecting the economy a year, two year, a year and a half out, which is when monetary policy can affect the economy. And so that's part of why the classic reasoning of why a central bank should look through an oil shock as the Federal Reserve has historically done.","offset":252,"duration":16}],"startTime":97},{"title":"Positive vs. Negative Supply Shocks","summary":"Governor Miran details how short-term negative supply shocks, like oil price spikes, do not fuel long-term inflation. He contrasts this with positive supply shocks such as AI and deregulation, which drive persistent disinflationary trends.","entries":[{"text":"Host: So that idea of looking through an oil shock was something that's really come forth in terms of recent discussions here. It seems like every few years we have some sort of shock that we have to navigate through. And I'm curious if you could just unpack it, you know, the discussion seems to be that a lot of these supply shocks seem to go in one direction, one being higher inflation. How do you think about that?","offset":268,"duration":24},{"text":"Governor Miran: Yeah, so I'll say a couple things. Uh, one is when you think about how these negative supply shocks are hitting the economy, things like oil prices moving higher, uh, as I said before it affects headline inflation very much in the short term but as you look further out it doesn't affect anything.","offset":292,"duration":15},{"text":"Governor Miran: And that is if you were to get concerned about these negative supply shocks, that's what you would be looking for. You'd be looking for a rise in inflation expectations further out in time. And if you look at the inflation swap market, you see that forward inflation expectations a year out, two years out, three years out are all pretty much unaffected by what's been going on.","offset":307,"duration":20},{"text":"Governor Miran: And in fact a lot of them are lower since the start of since- sorry, a lot of them are lower since we met in January, since the FOMC met in January. And so there's been zero bleed through of the of the negative supply shock of oil prices into inflation expectations further out, uh, you know sort of further out in time which which again is when monetary policy would be able to affect.","offset":327,"duration":19},{"text":"Governor Miran: The other thing you'd be concerned about is if there were a wage price spiral. If prices go higher and then wages go higher and that pushes prices higher again, you get a negative feedback loop that just creates a self-fulfilling inflationary spiral that requires tightening from the monetary, uh, authority to offset and to and to squash.","offset":346,"duration":19},{"text":"Governor Miran: That's not something that we see happening right now because the labor market, as I said before, has been on this very gradual cooling trend for about three for about three years now. And with the labor market very gradually cooling and declining wage pressures, you just are not going to get a wage price spiral that would be the type of thing that would get- that a that a central bank would normally respond to.","offset":365,"duration":24},{"text":"Governor Miran: Now you said something else that I'd like to pick up on, which is that a lot of we've had a lot of negative supply shocks, uh, you know sort of over time. And I think that there's a tendency to think that they that those are the only supply shocks that we've that we've experienced. And that's not the case. There are also positive supply shocks that are hitting the economy too.","offset":389,"duration":19},{"text":"Governor Miran: And these get a lot of attention too. So one of them is AI, right? AI is a positive supply shock, it increases the productive capacity of the economy, it lets people produce more with less inputs into production. That's a positive supply shock. Another very powerful positive supply shock that's been hitting the economy has been the trend in deregulation.","offset":408,"duration":20},{"text":"Governor Miran: Now I think this is a- this is a group of people who are focused on crypto, regulations have probably played a large part in a number of your business models. And having to deal with those regulations has probably for a number of people in this room at some point slowed you down, reduced the amount of things you can produce, increased the cost of production.","offset":428,"duration":14},{"text":"Governor Miran: And as those regulatory barriers recede, it becomes easier for you to make products that people want to buy. And so as the regulatory, as the regulatory backdrop becomes easier, that's a positive supply shock that hits the economy too. Now I gave a speech in January in Greece where I looked at the literature, the modern literature on regulation and it's very difficult to sort of quantify the federal regulatory code and turn that into a number in a way that economists would like to do rigorous empirical studies.","offset":442,"duration":31},{"text":"Governor Miran: But I looked at the modern literature that sort of uses AI and machine learning tools to do so. And I calculated that the deregulatory wave that's been hitting the economy over the last 15 months or so would ultimately drag on inflation by about half a percent a year for the next few years, right?","offset":473,"duration":18},{"text":"Governor Miran: So that's that's that's quite chunky. Now just a couple of weeks ago, there was a new Federal Reserve staff research paper released by two staff economists at the Fed, uh, Danilo, um, uh, Cascaldi Garcia and Matteo Iacoviello. And what this Fed research paper on deregulation uh found is they they did a they did a entirely different estimation method than the previous literature and they did an entirely different measurement method for regulations than the previous literature.","offset":491,"duration":33},{"text":"Governor Miran: And when you apply their results to the scope of the deregulatory shock that we've seen over the last 15 months or so, it implies a roughly uh 0.3% drag on inflation each year for the next few years, right? So that's not just a one-off effect, that's a persistent uh disinflationary effect from the receding regulatory backdrop.","offset":524,"duration":19},{"text":"Governor Miran: Now using an entirely different literature, entirely different estimation methods, I calculated 0.5, they calculated 0.3. I think those are probably within noise of each other, they're certainly within confidence bands, I wouldn't be able to reject one in favor of the other. But either of them are very big and I think very substantial and of the types of shocks that policymakers ought to take into account when we're thinking about the correct settings for monetary policy.","offset":543,"duration":22},{"text":"Governor Miran: So yes, it is the case that we have had a number of negative supply shocks hit the economy, things like oil moving higher. Um, but it's also the case that we have very powerful positive supply shocks hitting the economy too. And unlike oil, I expect some of these, like deregulation and AI, to be persistent in their disinflationary effects.","offset":565,"duration":19}],"startTime":268},{"title":"Federal Funds Rate Forecast","summary":"Discussing the Summary of Economic Projections, Miran outlines his forecast for the federal funds rate. He contends that current monetary policy is modestly restrictive and should be adjusted back to a neutral rate to avoid unnecessarily slowing the economy.","entries":[{"text":"Host: So last week's meeting was a summary of economic projections update meeting. I would love to just hear about when you balance out the context of either these positive or negative supply shocks, how does that characterize your forecast for the federal funds rate for the next year?","offset":584,"duration":18},{"text":"Governor Miran: So in the last uh summary of projections, because of the oil shock, right, that hits the economy very quickly whereas I think some of these other shocks play out over time, I did raise my inflation projection for my headline inflation projection for this year to 2.7%, right?","offset":602,"duration":17},{"text":"Governor Miran: So I moved it a little bit higher because of the oil shock. However, as I said before, this is not the type of thing that policy should respond to because that happens all up front and policy affects the economy 12 to 18 months out. It has very oil moving higher now has very little inflationary consequence 12 to 18 months out, all the inflation happens up front.","offset":619,"duration":22},{"text":"Governor Miran: What does happen 12 to 18 months out is the economy might be weaker because the because every dollar that people put into, you know filling their gas tanks is a dollar they're not spending on other goods and services. And so that might put upward pressure on the unemployment rate. So in the the March summary of economic projections, I boosted my policy rate by half a percent not due to oil in Iran but due to the inflation data that we received in between the December summary projections and the March summary projections.","offset":641,"duration":27},{"text":"Governor Miran: That puts me at- that puts my my projection at about neutral, right? So the neutral policy rate is the monetary policy interest rate that's neither stimulative nor accommodative. Right now I think that's probably about two and a half percent. Uh, two and a half to to two and three quarters percent. We're about 75 basis points above that level.","offset":668,"duration":24},{"text":"Governor Miran: Uh, so you know I think it's- sorry, yeah we're about sorry, we're about a percentage point above that level right now. Uh, I think it's appropriate over the course of this year to just get back to neutral. I don't think the economy needs monetary policy to be slamming on the gas and and accelerating the economy uh like it was in 2021 or 2022.","offset":692,"duration":19},{"text":"Governor Miran: Um, but I also don't think it needs to be holding the economy back. And right now it is modestly restrictive and it is holding the economy back and and I don't think that's consistent with the macroeconomic backdrop.","offset":711,"duration":8}],"startTime":584},{"title":"AI, Demographics, and the Neutral Rate","summary":"Miran explores the competing forces that influence the long-term neutral interest rate (R-star). While the AI productivity boom pushes the rate higher, crashing population growth and an improving fiscal deficit exert strong downward pressure.","entries":[{"text":"Host: So earlier in there you mentioned this idea of a AI potential productivity boom and how it could be much more durable than something like a negative oil supply shock. And the first thing that comes to my mind there when I think about a durable shock like that is what is its potential impact on the long-term economic neutral rate or R Star? I'd be curious to hear about how what's your perspective on the more long-term forecasts of the neutral rate in light of such a potentially powerful shock positive shock such as the AI productivity boom.","offset":719,"duration":31},{"text":"Governor Miran: Yeah, so look, uh you know I think that the AI productivity boom um does unambiguously push the neutral rate higher. Uh however I think there's a lot of other countervailing factors that have been weighing on the neutral rate. And so it is the case that if if investing becomes more profitable over time, if investing becomes more productive over time, that raises the long-term neutral, you know, uh neutral rate of interest that you get on capital on investing.","offset":750,"duration":26},{"text":"Governor Miran: And that boost that boosts neutral, but there's other things that have been weighing on it. And one thing that I've been trying to draw attention to that's been weighing on it I think quite quite powerfully is the change in population growth. We lived through the biggest shocks to the population growth rate in both directions in certainly in my lifetime, probably in the lifetimes of many many folks in this room uh within the course of a few years.","offset":776,"duration":23},{"text":"Governor Miran: Right, we had a period of of massively growing population in 2021 to 2023 or so, and then in 2024 to five six uh that population growth plummeted pretty much to, you know, working age population growth is is probably, you know, pretty close to flat now.","offset":799,"duration":21},{"text":"Governor Miran: And so that was a huge spike up in growth and then a huge spike down. And just as the neutral interest rate is a function of the equilibrium returns in capital that are affected by productivity, it's also affected by the growth rate in the economy which is affected by uh population growth. And so that in my view is a is a very big thing weighing on interest rates.","offset":820,"duration":18},{"text":"Governor Miran: And you see that uh across the world. We spent many years before the pandemic discussing discussing Japanization of global interest rates. You know declining fertility rates, declining, you know aging populations around the world, declining population growth led to lower interest rates in a lot of countries.","offset":838,"duration":21},{"text":"Governor Miran: And we and there was a lot of time spent discussing is this is everybody going in this direction, right? I think that those channels, those pathways were always valid economic pathways and maybe they were they were of primary importance sort of before the pandemic and a lot of people were talking about them.","offset":859,"duration":16},{"text":"Governor Miran: And then during the pandemic, a lot of other things started to matter, mostly related to the pandemic and then the massive uh economic support programs that were launched after that. Um, but those the connection between population, aging, demographic growth, and interest rates didn't go away, right?","offset":875,"duration":16},{"text":"Governor Miran: It just, you know, other things occupied our attention but those pathways are still valid. And I think that we'll see in coming years that they they matter again because of the the size of the shocks that we've experienced to population growth. The other thing that I think weighs on the interest rate is the improving fiscal deficit.","offset":891,"duration":14},{"text":"Governor Miran: And so uh, you know I think that if you look at the fiscal deficit in Q2 through Q4 of last year versus the fiscal deficit of Q2 through Q4 of the previous year uh and of course I think the major Delta is the biggest delta is tariffs, it's not all tariffs but the biggest delta is tariffs.","offset":905,"duration":21},{"text":"Governor Miran: Um, the fiscal deficit came in quite a bit and at an annualized rate it's probably, if I remember correctly, about 450 but that 450 billion but um that's off the top of my head so that might not be correct. It's it's it's a significant decline if you look at Q2 through Q4 of 2025 calendar Q2 through Q4 of 2025 versus calendar Q2 through Q4 of 2024.","offset":926,"duration":26},{"text":"Governor Miran: And I think the major delta is tariffs, right? So that declining uh that decline in fiscal borrowing is something that pushes around the neutral rate too and that is something that I think will also weigh on it. So uh, you know so my view of the neutral rate is towards the bottom of the range of where my colleagues' view is if you look at the SEP but I'm not outside of the range.","offset":952,"duration":19}],"startTime":719},{"title":"Podcast Ad Break","summary":"A brief intermission featuring promotional spots for Arkham's crypto intelligence platform and Blockworks Investor Relations.","entries":[{"text":"Host: Before you place a trade, you should know who is actually moving the market. That's where Arkham comes in. Arkham is a crypto intelligence platform and exchange that lets you see real on-chain data: which wallets are buying, selling, and moving funds, and then trade directly on that information. Arkham was built to make blockchains human-readable. Instead of raw transaction data, you get clear profiles, visualizers, and custom dashboards that show what's really happening beneath the surface. Tracking wallets and fund flows is becoming just as important as technical or fundamental analysis. On-chain intelligence is also one of the best tools traders have to protect themselves against hacks, rugs, and scams. With Arkham exchange, you can go from insight to execution in one place. The world's first exchange powered by crypto intelligence. Check out Arkham and start trading with real on-chain insight at arkham.com.","offset":971,"duration":50},{"text":"Host: Hey all, Blockworks co-founder Michael Ippolito here. Quick break to talk about something we've just launched, Blockworks Investor Relations. As the market shifts toward institutional capital, investors want more transparency, more standardization, and a higher level of professionalism. But the traditional IR model is slow, manual, and not built for how crypto works. If you're building on-chain, your data is already live, your business is already transparent, the challenge is turning that into a clear, credible story for investors. That's exactly what we're solving with Blockworks IR. It's a single platform that brings together real-time analytics, branded investor portals, and hands-on advisory support so you can communicate what matters. If you're an on-chain business looking to level up your investor strategy, check out Blockworks Investor Relations at blockworks.co/investor-relations. Alright, back to the episode.","offset":1021,"duration":48}],"startTime":971},{"title":"Deregulation & the Output Gap","summary":"Critiquing the metaphor of 'running the economy hot,' Miran explains that expanding supply capacity via deregulation and capital deepening is like adding horsepower to a car. He explores how these supply-side policies alter potential GDP and allow demand to grow without triggering inflation.","entries":[{"text":"Host: So the other major durable trend you mentioned was this idea of deregulation. And just last week the Federal Reserve put out some initial asked for consultation on this update to the Federal Reserve's perspective on how it contributes to that, you know, update on deregulation. And I'm curious if you could just provide your perspective on that and how you're thinking about it.","offset":1069,"duration":23},{"text":"Governor Miran: So if you look if you take an economics class there's supply and demand, right? And if you hold supply constant and you slam your foot on the gas for demand and you push demand out, you get inflation. And if you push supply out, then you don't get inflation, you can produce more with less. And I think, you know one expression that that people online use a lot is running it hot, right?","offset":1092,"duration":29},{"text":"Governor Miran: I think that running it hot is you're sort of if you use that expression, you're conditioning upon what the engine is. And if you're trying to go 60 miles an hour in a car with a handful of horsepower, you know you're probably running it hot. But if you're trying to go 60 miles an hour in a car with a large number of horsepower, hundreds of horsepower, you're not running it hot, right?","offset":1121,"duration":21},{"text":"Governor Miran: That car can handle that speed. And this is the difference between pushing the supply side out versus restricting the supply side. If you push the supply side out of out of the economy and supply is growing quickly, then demand can grow quickly too and it's not inflationary. If you're holding the supply side in and and the economy can't produce supply to meet demand then you're going to get inflation.","offset":1142,"duration":21},{"text":"Governor Miran: And I think that's the difference and that's where things like AI and things like deregulation come into play is because they allow the economy to produce more with less. And that's also true of capital deepening. If you look at the incentives for investment uh that that were in part of the tax legislation last year, uh you know they full expensing on on full expensing on equipment and full expensing on R&D.","offset":1163,"duration":24},{"text":"Governor Miran: Uh these incentivize investment in productive capital. And when you have more productive capital you can produce more, right? And so I think it's all it's all a function of of so when you sort of say something like running it hot it's wildly imprecise because it's a statement that sort of assumes that supply is constant, that you can't increase the horsepower of the car.","offset":1187,"duration":17},{"text":"Governor Miran: But if you go through deregulation, if you go through AI, if you go through capital deepening, you're increasing the horsepower of the car and you can produce more with less and therefore demand can grow faster and the engine doesn't heat up when you go fast. So I think that that metaphor needs needs some adjustment.","offset":1204,"duration":14},{"text":"Governor Miran: But when I think about these supply side policies and their interaction with monetary policy, a lot of it flows through what we call- so there's there's two primary channels. One is what happens to prices, right? I talked a little bit about that with deregulation. If you can produce more with less, you have you lower the cost of production that feeds through into consumer prices.","offset":1218,"duration":23},{"text":"Governor Miran: If you're removing barriers to entry because regulations can serve as barriers to entry and I talked a lot about this in my January regulation speech, um you're creating more competition, more competition will lower prices, it will lower it will lower markups, it will lower monopoly profits. The other channel through which the through which I think a lot of the supply side stuff affects um things that we care about from monetary policy is through what we would call the output gap.","offset":1241,"duration":24},{"text":"Governor Miran: And the output gap is the difference between potential growth what the economy can produce uh with unemployment at its natural level and where actual output is. And so if you've got the unemployment rate at 8% there's tons of unused slack in the economy, there's tons of unused resources, the economy is producing below potential, there's a lot more it can produce.","offset":1265,"duration":23},{"text":"Governor Miran: If you've got the unemployment rate at 3%, you're above potential because you're trying to produce more than the economy can produce in a non-inflationary way and you get price pressures as a result. Now what matters when you think about shocks to the supply side, whether they're AI, oil, regulation, no matter what the shock is what matters when you think about this is is it pushing out or pulling in actual supply or potential supply or actual GDP or potential GDP by more or less?","offset":1288,"duration":31},{"text":"Governor Miran: And so if you have a situation like uh you know and one assumption that a lot of people make is that actual and potential move out by roughly the same amount in response to a lot of these productivity shocks. There are times when I think that that's a good assumption. And so for example if you think about uh the Greenspan productivity story in the 90s where uh former chairman Greenspan was making uh was making the case that improvements in productivity were going to lead to high GDP growth that was non-inflationary.","offset":1319,"duration":34},{"text":"Governor Miran: And therefore policy doesn't really need to respond. Now I think that argument I think makes a lot of sense in the context of the telecoms revolution because if you're building lots of telecom capacity, you have to tear up streets, lay telecom wire, put the streets back together, there's a lot of investment activity that occurs.","offset":1353,"duration":19},{"text":"Governor Miran: And so you get the increase in demand because of the investment activity and you get the increase in supply because you have a productivity enhancement from the from the increased internet connectivity. The net change in the output gap, I think it's a fair assumption to assume it could be zero- sorry, it could be neutral. Uh, with other type of shocks that might not be the case.","offset":1372,"duration":20},{"text":"Governor Miran: Certainly with the case of a regulation shock, I think I think that actual- I think that actual GDP will move out by a lot less than potential GDP. So for example if you've got a smokestack that you can run 8 hours a day with strict carbon regulations and then the carbon regulations ease and you can run it 16 hours a day, you don't need to do additional investment because you've got the capital stock already there.","offset":1392,"duration":24},{"text":"Governor Miran: You've got the smokestack, it's just that you can run the smokestack more hours a day. And so that's a case in which potential GDP goes up I think by a lot more than actual GDP. The amount of supply you can produce has gone up by a lot but the amount of demand has not gone up by a lot because all you've done is ease ease production constraints, you haven't increased a lot of investment demand.","offset":1416,"duration":18},{"text":"Governor Miran: AI, I don't know. Uh AI could be somewhere in between. So certainly AI creates a huge amount of investment demand in the form of uh you know GPUs in data you know in data centers. A lot of the GPU demand I think gets leaked overseas. You know a lot of the GPUs are not they're not made in the United States, right? Uh certainly data center demand does lead to investment activity in the United States.","offset":1434,"duration":25},{"text":"Governor Miran: Uh certainly we pay a lot of of of employee compensation to people who are working on on developing AI, integrating AI into into existing company workstreams. Um but where does it shake out on potential GDP versus actual GDP? I don't really have a a firm view.","offset":1459,"duration":18}],"startTime":1069},{"title":"Skinny Master Accounts & Stablecoins","summary":"Transitioning to digital assets, Miran shares his views on skinny master accounts and the immense potential for stablecoins to serve global populations. He notes that providing unbanked or highly restricted regions with access to dollar savings could create a new global savings glut.","entries":[{"text":"Host: So I want to shift gears here into the heart of what we're truly here for this conference, which is digital assets and and your perspective on them. And I want to start with this introduction of these skinny master accounts that have been begun rolling out, we've seen Kraken get approved for one. And so I would just love to get your perspective on how you think about the role of these skinny master accounts with respect to where it sits in comparison to a full-fledged master account.","offset":1477,"duration":25},{"text":"Governor Miran: Sure, so this this ties into the previous conversation nicely because we were talking about productivity growth and we were talking about technological advancements. And if you look over the very very long term of human history, it is technological advancements that drive all of all of the growth in human prosperity that we've experienced.","offset":1502,"duration":16},{"text":"Governor Miran: Um, and I do and and I think that's true of a wide variety of technological advances and I think that financial innovation is an important part of that. Because financial innovation and and advances in financial technology and financial capabilities help to allocate capital to where it needs to be to make the economy produce efficiently, produce more and and generally drive human prosperity.","offset":1518,"duration":22},{"text":"Governor Miran: So I do think that financial innovation is important too. Um, I think that introducing these skinny master accounts for stablecoins will be uh will be an important step uh in the direction of of allowing that type of innovation to occur. The Federal Reserve recently put out a request for information for comments on skinny master accounts and we received a large volume of these comments.","offset":1540,"duration":27},{"text":"Governor Miran: The staff are going through the comments now. Uh, I've I've I've looked at a few of them a few of the comments. Some of things that stuck out at me were things like ACH access and um caps on and and caps on the the balances uh the size of the of the skinny master accounts. Um but this is an area of of this is an area of of active examination and and active rulemaking.","offset":1567,"duration":23},{"text":"Governor Miran: And so you know it is it is something that is moving ahead. I'm excited for Governor Waller who leads the payments committee to put uh to sort of to push this to next steps and and I think it's got a lot of potential.","offset":1590,"duration":11},{"text":"Host: The other big trend that we're seeing is of course around stablecoins. You had a landmark speech about stablecoins recently. And I would love to just hear about how you're evolving your thinking there and its role within the broader financial system, where you see it being incorporated, where you see think it complements what already exists there and yeah just how you're thinking about that.","offset":1601,"duration":20},{"text":"Governor Miran: Thanks, so I gave a speech in November, I think. About stablecoins. And and you know I I made a couple of arguments about stablecoins in that speech. Um the major argument that I made was that if you've got uh G-SAX compliant stablecoins, um they help you they help facilitate digital payments.","offset":1621,"duration":28},{"text":"Governor Miran: But from a savings pool of capital perspective in the United States, in Europe, in places that already have access to dollar denominated savings accounts, dollar denominated money market funds, treasury bills, if you have a system with with open capital- and open capital markets, from a savings perspective stablecoins don't I think add as much.","offset":1649,"duration":26},{"text":"Governor Miran: From a payments perspective they do because they're facilitating digital payments. But if you've got a huge pool of capital, I don't know that stablecoins are adding are adding that much. Now that's not true in places with capital controls and it's not true in places where the banking system struggles to penetrate because of geography or development, right?","offset":1675,"duration":21},{"text":"Governor Miran: And so you've got large parts of the world where people are living behind capital controls where if they wanted access to dollar savings instruments like dollar deposits, treasury bills, money market funds, they don't have access- they they don't have the capacity to do so because the country they're living in, the law is you just can't move your money into dollars, we're not going to let you.","offset":1696,"duration":18},{"text":"Governor Miran: And it doesn't matter how bad the people want access to dollars, they're just not allowed to. There are other parts of the world where it's very rural and there may not be banking services. And maybe people have a cell phone and so they, you know have a satellite link on their cell phone but they have no access to actual banking banking services.","offset":1714,"duration":17},{"text":"Governor Miran: Or the banking services in the country are too unreliable and volatile and or there maybe too much inflation and they don't want to use the banking services. So my perspective is that is that I'm very optimistic about stablecoin growth. But I think that a lot of the stablecoin uptake is actually going to come from large volumes of money that want to be denominated in dollars, that want to sit in dollars, and are currently unable to sit in dollars, right?","offset":1731,"duration":30},{"text":"Governor Miran: Huge pools of savings that have no other way of getting into the into the dollar system suddenly there's a way of doing it. And of course you still need to get onto the crypto ecosystem to do that so there is still an entry wheel issue but I think it makes the- I think it makes the problem easier. And I I sort of think of it a bit like, you know a ride-share app sort of being a new technology that broke up the monopoly of a taxicab medallion.","offset":1761,"duration":23},{"text":"Governor Miran: It's that type of thing that sort of that creates that ability to sort of start circumventing barriers to dollar deposits that people didn't have access to before. Now of course tying this back to neutral rate that we were discussing before, if you have huge inflows from the rest of the world into US dollar denominated savings, that's going to weigh on the neutral rate, right?","offset":1784,"duration":19},{"text":"Governor Miran: This is what happened in the late 90s and early 2000s, uh what former chairman Ben Bernanke called the global savings glut. Um if we hit the more optimistic projections of stablecoin growth, you could be looking at at magnitudes that are that are, you know maybe not quite as big as the global savings glut but let's say half as big.","offset":1803,"duration":20},{"text":"Governor Miran: So you know there is the scope for these to matter uh you know very substantially for monetary policy as well, which of course would be a very, you know which would be a very powerful force weighing on interest rates, keeping them lower.","offset":1823,"duration":12}],"startTime":1477},{"title":"Tokenized Deposits & Parting Advice","summary":"Miran briefly shares his initial impressions of tokenized deposits as an incremental improvement to banking. He concludes by encouraging crypto innovators to actively participate in regulatory comment periods to help shape more efficient rules.","entries":[{"text":"Host: Yeah, I completely agree that I I think a lot about stablecoins as being this this huge tailwind for the rest of the world to be able to gain entry to the dollar system. I'm curious how do you think about the other side of the equation, which I think goes understated, which is tokenized deposits? What do you think about those?","offset":1835,"duration":16},{"text":"Governor Miran: Yeah, so tokenized deposits strike me as a and to be clear I have not made a I have not made an extensive study of tokenized deposits in particular, but what I know about them, which is probably less than you do, um is that they strike me as an improve- an improvement on services that are already being offered by banks, right?","offset":1851,"duration":22},{"text":"Governor Miran: Um, is that something that um is that something that ultimately ends up revolutionizing the banking system? Um, I don't know, but this tokenized deposits strike me as as, you know another step in a long line of improving the financial services that that banks offer um by by utilizing technology. But I haven't made an extensive study of it and I would be open to changing my mind based on things you tell me.","offset":1873,"duration":27},{"text":"Host: Yeah we'll have to have you back again for another conversation on that one but about that. Um just for for the folks out there who are core to the crypto industry and you know potential founders etc that are working towards this this huge, you know tailwind that is going on of financial innovation, we'd just love to hear any sort of parting words to those that are trying to build and innovate in the space in in the US financial system of, yeah just your final words to them.","offset":1900,"duration":25},{"text":"Governor Miran: Uh so I'll repeat what I said before which is that innovation is the driver is the main driver of long-run human prosperity. So if you are working on innovation thank you, um for for doing what you do. Um and with respect to issues in payments and payments technologies, you know when the Federal Reserve makes policy we we follow the Administrative Procedure Act which is what all regulatory agencies have to do and we issue uh we issue, you know sort of notices of proposed rulemaking, we issue requests for information.","offset":1925,"duration":36},{"text":"Governor Miran: Respond to those, give us comments. You know we we search for comments from industry, from stakeholders, from innovators so that we can know whether the regulations are doing the job that they are supposed to or where they need to be pushed or pulled to get them into a place to make the economy more efficient. So you know we we put out these notices, um you know let us let us know what need- you know let us know what needs changed to make the economy more efficient.","offset":1961,"duration":20},{"text":"Host: Incredible. Well uh can't thank you enough for coming here and talking at the Digital Assets Summit Governor Miran, that was incredible. Thank you.","offset":1981,"duration":10},{"text":"Governor Miran: Thanks for having me.","offset":1991,"duration":15}],"startTime":1835}],"entries":[{"text":"Governor Miran: Oil moving higher now has very little inflationary consequence 12 to 18 months out, all the inflation happens up front. And so that's part of why a central bank should look through an oil shock as the Federal Reserve has historically done.","offset":0,"duration":11},{"text":"Governor Miran: Forward inflation expectations a year out, two years out, three years out are all pretty much unaffected by what's been going on and in fact a lot of them are lower since the FOMC met in January.","offset":11,"duration":10},{"text":"Governor Miran: My view is that the economy can bear additional support for the labor market from monetary policy. With the labor market very gradually cooling and declining wage pressures, you just are not going to get a wage price spiral that a central bank would normally respond to.","offset":21,"duration":13},{"text":"Governor Miran: When you start to say something like running it hot, it's wildly imprecise because it's a statement that sort of assumes that supply is constant, that you can't increase the horsepower of the car.","offset":34,"duration":9},{"text":"Governor Miran: I don't think the economy needs monetary policy to be slamming on the gas and accelerating the economy like it was in 2021 or 2022, but I also don't think it needs to be holding the economy back. And right now it is modestly restrictive and it is holding the economy back and I don't think that's consistent with the macroeconomic backdrop.","offset":43,"duration":16},{"text":"Governor Miran: What matters when you think about shocks to the supply side, whether they're AI, oil, regulation, no matter what the shock is what matters when you think about this is-","offset":59,"duration":11},{"text":"Narrator: Nothing said on Forward Guidance is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only, and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in the companies, funds, or projects discussed. As always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research.","offset":70,"duration":27},{"text":"Host: Governor Miran, great to have you to the Digital Summit. Welcome.","offset":97,"duration":9},{"text":"Governor Miran: Thanks for having me and let me just clarify that I'm one member of a Board of seven governors, there are seven of us. I'm not a governor in the sense of a governor of the Bank of England or something like that.","offset":106,"duration":10},{"text":"Host: That's a good clear, hey Governor. Governor Miran, would love to just start by unpacking the most recent FOMC meeting that occurred last week. You dissented in support of a 25 basis rate cut, so I'd just love for you to unpack your current framework and why you dissented there.","offset":116,"duration":16},{"text":"Governor Miran: Sure, thanks. Look, you know at the Federal Reserve we have a dual mandate. We are tasked by Congress with paying attention to inflation, stable prices, and to the labor market. My view is that the inflation side of the mandate has, despite high measured inflation, has not been so problematic.","offset":132,"duration":17},{"text":"Governor Miran: Because a lot of the inflation excess over target has been as a result of some quirks of measurement of things like portfolio management services, which is basically just the stock market going up, biasing the way we measure inflation by 30 to 40 basis points.","offset":149,"duration":15},{"text":"Governor Miran: Once you correct for those things, I do not view inflation as being overly problematic, whereas the labor market has been on a very gradual trend of weakening over the course of the last three years. That trend has been in place, it's been continual, you see it in increasing difficulty of finding jobs for new entrants to the labor market.","offset":164,"duration":16},{"text":"Governor Miran: You see it in increasing length of time and people spend between jobs during unemployment. And so my view is that the economy can bear additional support for the labor market from monetary policy. Now a lot of what's been going on in the last few weeks is of course been tied to the war in Iran.","offset":180,"duration":17},{"text":"Governor Miran: And I think what's going on in oil prices has spooked a lot of people. Uh, you know, and I understand from a trading perspective, from a markets perspective, things whip around wildly in both directions, you get headline ping-pong and that pushes markets. And if you have leveraged positions, that can feel very, uh, you know, sort of very intense.","offset":197,"duration":16},{"text":"Governor Miran: But from a monetary policy perspective, we have to make policy for 12 to 18 months from now because there are big lags with which monetary policy hits the economy. If we adjust interest rates, it doesn't feed through into actual economic growth into actual unemployment and inflation for at least a year.","offset":213,"duration":19},{"text":"Governor Miran: So we need to set policy for a year, to a year and a half out. And the way that changes in oil prices affect the economy is actually much faster than that. When you get a spike up in oil prices, when you get a move higher in oil from something like what's going on in Iran, the oil price goes up immediately and headline inflation goes up a lot in the short term.","offset":232,"duration":20},{"text":"Governor Miran: But as you look a year, two year, a year and a half out, it's very unlikely that that causes subsequent effects that are affecting the economy a year, two year, a year and a half out, which is when monetary policy can affect the economy. And so that's part of why the classic reasoning of why a central bank should look through an oil shock as the Federal Reserve has historically done.","offset":252,"duration":16},{"text":"Host: So that idea of looking through an oil shock was something that's really come forth in terms of recent discussions here. It seems like every few years we have some sort of shock that we have to navigate through. And I'm curious if you could just unpack it, you know, the discussion seems to be that a lot of these supply shocks seem to go in one direction, one being higher inflation. How do you think about that?","offset":268,"duration":24},{"text":"Governor Miran: Yeah, so I'll say a couple things. Uh, one is when you think about how these negative supply shocks are hitting the economy, things like oil prices moving higher, uh, as I said before it affects headline inflation very much in the short term but as you look further out it doesn't affect anything.","offset":292,"duration":15},{"text":"Governor Miran: And that is if you were to get concerned about these negative supply shocks, that's what you would be looking for. You'd be looking for a rise in inflation expectations further out in time. And if you look at the inflation swap market, you see that forward inflation expectations a year out, two years out, three years out are all pretty much unaffected by what's been going on.","offset":307,"duration":20},{"text":"Governor Miran: And in fact a lot of them are lower since the start of since- sorry, a lot of them are lower since we met in January, since the FOMC met in January. And so there's been zero bleed through of the of the negative supply shock of oil prices into inflation expectations further out, uh, you know sort of further out in time which which again is when monetary policy would be able to affect.","offset":327,"duration":19},{"text":"Governor Miran: The other thing you'd be concerned about is if there were a wage price spiral. If prices go higher and then wages go higher and that pushes prices higher again, you get a negative feedback loop that just creates a self-fulfilling inflationary spiral that requires tightening from the monetary, uh, authority to offset and to and to squash.","offset":346,"duration":19},{"text":"Governor Miran: That's not something that we see happening right now because the labor market, as I said before, has been on this very gradual cooling trend for about three for about three years now. And with the labor market very gradually cooling and declining wage pressures, you just are not going to get a wage price spiral that would be the type of thing that would get- that a that a central bank would normally respond to.","offset":365,"duration":24},{"text":"Governor Miran: Now you said something else that I'd like to pick up on, which is that a lot of we've had a lot of negative supply shocks, uh, you know sort of over time. And I think that there's a tendency to think that they that those are the only supply shocks that we've that we've experienced. And that's not the case. There are also positive supply shocks that are hitting the economy too.","offset":389,"duration":19},{"text":"Governor Miran: And these get a lot of attention too. So one of them is AI, right? AI is a positive supply shock, it increases the productive capacity of the economy, it lets people produce more with less inputs into production. That's a positive supply shock. Another very powerful positive supply shock that's been hitting the economy has been the trend in deregulation.","offset":408,"duration":20},{"text":"Governor Miran: Now I think this is a- this is a group of people who are focused on crypto, regulations have probably played a large part in a number of your business models. And having to deal with those regulations has probably for a number of people in this room at some point slowed you down, reduced the amount of things you can produce, increased the cost of production.","offset":428,"duration":14},{"text":"Governor Miran: And as those regulatory barriers recede, it becomes easier for you to make products that people want to buy. And so as the regulatory, as the regulatory backdrop becomes easier, that's a positive supply shock that hits the economy too. Now I gave a speech in January in Greece where I looked at the literature, the modern literature on regulation and it's very difficult to sort of quantify the federal regulatory code and turn that into a number in a way that economists would like to do rigorous empirical studies.","offset":442,"duration":31},{"text":"Governor Miran: But I looked at the modern literature that sort of uses AI and machine learning tools to do so. And I calculated that the deregulatory wave that's been hitting the economy over the last 15 months or so would ultimately drag on inflation by about half a percent a year for the next few years, right?","offset":473,"duration":18},{"text":"Governor Miran: So that's that's that's quite chunky. Now just a couple of weeks ago, there was a new Federal Reserve staff research paper released by two staff economists at the Fed, uh, Danilo, um, uh, Cascaldi Garcia and Matteo Iacoviello. And what this Fed research paper on deregulation uh found is they they did a they did a entirely different estimation method than the previous literature and they did an entirely different measurement method for regulations than the previous literature.","offset":491,"duration":33},{"text":"Governor Miran: And when you apply their results to the scope of the deregulatory shock that we've seen over the last 15 months or so, it implies a roughly uh 0.3% drag on inflation each year for the next few years, right? So that's not just a one-off effect, that's a persistent uh disinflationary effect from the receding regulatory backdrop.","offset":524,"duration":19},{"text":"Governor Miran: Now using an entirely different literature, entirely different estimation methods, I calculated 0.5, they calculated 0.3. I think those are probably within noise of each other, they're certainly within confidence bands, I wouldn't be able to reject one in favor of the other. But either of them are very big and I think very substantial and of the types of shocks that policymakers ought to take into account when we're thinking about the correct settings for monetary policy.","offset":543,"duration":22},{"text":"Governor Miran: So yes, it is the case that we have had a number of negative supply shocks hit the economy, things like oil moving higher. Um, but it's also the case that we have very powerful positive supply shocks hitting the economy too. And unlike oil, I expect some of these, like deregulation and AI, to be persistent in their disinflationary effects.","offset":565,"duration":19},{"text":"Host: So last week's meeting was a summary of economic projections update meeting. I would love to just hear about when you balance out the context of either these positive or negative supply shocks, how does that characterize your forecast for the federal funds rate for the next year?","offset":584,"duration":18},{"text":"Governor Miran: So in the last uh summary of projections, because of the oil shock, right, that hits the economy very quickly whereas I think some of these other shocks play out over time, I did raise my inflation projection for my headline inflation projection for this year to 2.7%, right?","offset":602,"duration":17},{"text":"Governor Miran: So I moved it a little bit higher because of the oil shock. However, as I said before, this is not the type of thing that policy should respond to because that happens all up front and policy affects the economy 12 to 18 months out. It has very oil moving higher now has very little inflationary consequence 12 to 18 months out, all the inflation happens up front.","offset":619,"duration":22},{"text":"Governor Miran: What does happen 12 to 18 months out is the economy might be weaker because the because every dollar that people put into, you know filling their gas tanks is a dollar they're not spending on other goods and services. And so that might put upward pressure on the unemployment rate. So in the the March summary of economic projections, I boosted my policy rate by half a percent not due to oil in Iran but due to the inflation data that we received in between the December summary projections and the March summary projections.","offset":641,"duration":27},{"text":"Governor Miran: That puts me at- that puts my my projection at about neutral, right? So the neutral policy rate is the monetary policy interest rate that's neither stimulative nor accommodative. Right now I think that's probably about two and a half percent. Uh, two and a half to to two and three quarters percent. We're about 75 basis points above that level.","offset":668,"duration":24},{"text":"Governor Miran: Uh, so you know I think it's- sorry, yeah we're about sorry, we're about a percentage point above that level right now. Uh, I think it's appropriate over the course of this year to just get back to neutral. I don't think the economy needs monetary policy to be slamming on the gas and and accelerating the economy uh like it was in 2021 or 2022.","offset":692,"duration":19},{"text":"Governor Miran: Um, but I also don't think it needs to be holding the economy back. And right now it is modestly restrictive and it is holding the economy back and and I don't think that's consistent with the macroeconomic backdrop.","offset":711,"duration":8},{"text":"Host: So earlier in there you mentioned this idea of a AI potential productivity boom and how it could be much more durable than something like a negative oil supply shock. And the first thing that comes to my mind there when I think about a durable shock like that is what is its potential impact on the long-term economic neutral rate or R Star? I'd be curious to hear about how what's your perspective on the more long-term forecasts of the neutral rate in light of such a potentially powerful shock positive shock such as the AI productivity boom.","offset":719,"duration":31},{"text":"Governor Miran: Yeah, so look, uh you know I think that the AI productivity boom um does unambiguously push the neutral rate higher. Uh however I think there's a lot of other countervailing factors that have been weighing on the neutral rate. And so it is the case that if if investing becomes more profitable over time, if investing becomes more productive over time, that raises the long-term neutral, you know, uh neutral rate of interest that you get on capital on investing.","offset":750,"duration":26},{"text":"Governor Miran: And that boost that boosts neutral, but there's other things that have been weighing on it. And one thing that I've been trying to draw attention to that's been weighing on it I think quite quite powerfully is the change in population growth. We lived through the biggest shocks to the population growth rate in both directions in certainly in my lifetime, probably in the lifetimes of many many folks in this room uh within the course of a few years.","offset":776,"duration":23},{"text":"Governor Miran: Right, we had a period of of massively growing population in 2021 to 2023 or so, and then in 2024 to five six uh that population growth plummeted pretty much to, you know, working age population growth is is probably, you know, pretty close to flat now.","offset":799,"duration":21},{"text":"Governor Miran: And so that was a huge spike up in growth and then a huge spike down. And just as the neutral interest rate is a function of the equilibrium returns in capital that are affected by productivity, it's also affected by the growth rate in the economy which is affected by uh population growth. And so that in my view is a is a very big thing weighing on interest rates.","offset":820,"duration":18},{"text":"Governor Miran: And you see that uh across the world. We spent many years before the pandemic discussing discussing Japanization of global interest rates. You know declining fertility rates, declining, you know aging populations around the world, declining population growth led to lower interest rates in a lot of countries.","offset":838,"duration":21},{"text":"Governor Miran: And we and there was a lot of time spent discussing is this is everybody going in this direction, right? I think that those channels, those pathways were always valid economic pathways and maybe they were they were of primary importance sort of before the pandemic and a lot of people were talking about them.","offset":859,"duration":16},{"text":"Governor Miran: And then during the pandemic, a lot of other things started to matter, mostly related to the pandemic and then the massive uh economic support programs that were launched after that. Um, but those the connection between population, aging, demographic growth, and interest rates didn't go away, right?","offset":875,"duration":16},{"text":"Governor Miran: It just, you know, other things occupied our attention but those pathways are still valid. And I think that we'll see in coming years that they they matter again because of the the size of the shocks that we've experienced to population growth. The other thing that I think weighs on the interest rate is the improving fiscal deficit.","offset":891,"duration":14},{"text":"Governor Miran: And so uh, you know I think that if you look at the fiscal deficit in Q2 through Q4 of last year versus the fiscal deficit of Q2 through Q4 of the previous year uh and of course I think the major Delta is the biggest delta is tariffs, it's not all tariffs but the biggest delta is tariffs.","offset":905,"duration":21},{"text":"Governor Miran: Um, the fiscal deficit came in quite a bit and at an annualized rate it's probably, if I remember correctly, about 450 but that 450 billion but um that's off the top of my head so that might not be correct. It's it's it's a significant decline if you look at Q2 through Q4 of 2025 calendar Q2 through Q4 of 2025 versus calendar Q2 through Q4 of 2024.","offset":926,"duration":26},{"text":"Governor Miran: And I think the major delta is tariffs, right? So that declining uh that decline in fiscal borrowing is something that pushes around the neutral rate too and that is something that I think will also weigh on it. So uh, you know so my view of the neutral rate is towards the bottom of the range of where my colleagues' view is if you look at the SEP but I'm not outside of the range.","offset":952,"duration":19},{"text":"Host: Before you place a trade, you should know who is actually moving the market. That's where Arkham comes in. Arkham is a crypto intelligence platform and exchange that lets you see real on-chain data: which wallets are buying, selling, and moving funds, and then trade directly on that information. Arkham was built to make blockchains human-readable. Instead of raw transaction data, you get clear profiles, visualizers, and custom dashboards that show what's really happening beneath the surface. Tracking wallets and fund flows is becoming just as important as technical or fundamental analysis. On-chain intelligence is also one of the best tools traders have to protect themselves against hacks, rugs, and scams. With Arkham exchange, you can go from insight to execution in one place. The world's first exchange powered by crypto intelligence. Check out Arkham and start trading with real on-chain insight at arkham.com.","offset":971,"duration":50},{"text":"Host: Hey all, Blockworks co-founder Michael Ippolito here. Quick break to talk about something we've just launched, Blockworks Investor Relations. As the market shifts toward institutional capital, investors want more transparency, more standardization, and a higher level of professionalism. But the traditional IR model is slow, manual, and not built for how crypto works. If you're building on-chain, your data is already live, your business is already transparent, the challenge is turning that into a clear, credible story for investors. That's exactly what we're solving with Blockworks IR. It's a single platform that brings together real-time analytics, branded investor portals, and hands-on advisory support so you can communicate what matters. If you're an on-chain business looking to level up your investor strategy, check out Blockworks Investor Relations at blockworks.co/investor-relations. Alright, back to the episode.","offset":1021,"duration":48},{"text":"Host: So the other major durable trend you mentioned was this idea of deregulation. And just last week the Federal Reserve put out some initial asked for consultation on this update to the Federal Reserve's perspective on how it contributes to that, you know, update on deregulation. And I'm curious if you could just provide your perspective on that and how you're thinking about it.","offset":1069,"duration":23},{"text":"Governor Miran: So if you look if you take an economics class there's supply and demand, right? And if you hold supply constant and you slam your foot on the gas for demand and you push demand out, you get inflation. And if you push supply out, then you don't get inflation, you can produce more with less. And I think, you know one expression that that people online use a lot is running it hot, right?","offset":1092,"duration":29},{"text":"Governor Miran: I think that running it hot is you're sort of if you use that expression, you're conditioning upon what the engine is. And if you're trying to go 60 miles an hour in a car with a handful of horsepower, you know you're probably running it hot. But if you're trying to go 60 miles an hour in a car with a large number of horsepower, hundreds of horsepower, you're not running it hot, right?","offset":1121,"duration":21},{"text":"Governor Miran: That car can handle that speed. And this is the difference between pushing the supply side out versus restricting the supply side. If you push the supply side out of out of the economy and supply is growing quickly, then demand can grow quickly too and it's not inflationary. If you're holding the supply side in and and the economy can't produce supply to meet demand then you're going to get inflation.","offset":1142,"duration":21},{"text":"Governor Miran: And I think that's the difference and that's where things like AI and things like deregulation come into play is because they allow the economy to produce more with less. And that's also true of capital deepening. If you look at the incentives for investment uh that that were in part of the tax legislation last year, uh you know they full expensing on on full expensing on equipment and full expensing on R&D.","offset":1163,"duration":24},{"text":"Governor Miran: Uh these incentivize investment in productive capital. And when you have more productive capital you can produce more, right? And so I think it's all it's all a function of of so when you sort of say something like running it hot it's wildly imprecise because it's a statement that sort of assumes that supply is constant, that you can't increase the horsepower of the car.","offset":1187,"duration":17},{"text":"Governor Miran: But if you go through deregulation, if you go through AI, if you go through capital deepening, you're increasing the horsepower of the car and you can produce more with less and therefore demand can grow faster and the engine doesn't heat up when you go fast. So I think that that metaphor needs needs some adjustment.","offset":1204,"duration":14},{"text":"Governor Miran: But when I think about these supply side policies and their interaction with monetary policy, a lot of it flows through what we call- so there's there's two primary channels. One is what happens to prices, right? I talked a little bit about that with deregulation. If you can produce more with less, you have you lower the cost of production that feeds through into consumer prices.","offset":1218,"duration":23},{"text":"Governor Miran: If you're removing barriers to entry because regulations can serve as barriers to entry and I talked a lot about this in my January regulation speech, um you're creating more competition, more competition will lower prices, it will lower it will lower markups, it will lower monopoly profits. The other channel through which the through which I think a lot of the supply side stuff affects um things that we care about from monetary policy is through what we would call the output gap.","offset":1241,"duration":24},{"text":"Governor Miran: And the output gap is the difference between potential growth what the economy can produce uh with unemployment at its natural level and where actual output is. And so if you've got the unemployment rate at 8% there's tons of unused slack in the economy, there's tons of unused resources, the economy is producing below potential, there's a lot more it can produce.","offset":1265,"duration":23},{"text":"Governor Miran: If you've got the unemployment rate at 3%, you're above potential because you're trying to produce more than the economy can produce in a non-inflationary way and you get price pressures as a result. Now what matters when you think about shocks to the supply side, whether they're AI, oil, regulation, no matter what the shock is what matters when you think about this is is it pushing out or pulling in actual supply or potential supply or actual GDP or potential GDP by more or less?","offset":1288,"duration":31},{"text":"Governor Miran: And so if you have a situation like uh you know and one assumption that a lot of people make is that actual and potential move out by roughly the same amount in response to a lot of these productivity shocks. There are times when I think that that's a good assumption. And so for example if you think about uh the Greenspan productivity story in the 90s where uh former chairman Greenspan was making uh was making the case that improvements in productivity were going to lead to high GDP growth that was non-inflationary.","offset":1319,"duration":34},{"text":"Governor Miran: And therefore policy doesn't really need to respond. Now I think that argument I think makes a lot of sense in the context of the telecoms revolution because if you're building lots of telecom capacity, you have to tear up streets, lay telecom wire, put the streets back together, there's a lot of investment activity that occurs.","offset":1353,"duration":19},{"text":"Governor Miran: And so you get the increase in demand because of the investment activity and you get the increase in supply because you have a productivity enhancement from the from the increased internet connectivity. The net change in the output gap, I think it's a fair assumption to assume it could be zero- sorry, it could be neutral. Uh, with other type of shocks that might not be the case.","offset":1372,"duration":20},{"text":"Governor Miran: Certainly with the case of a regulation shock, I think I think that actual- I think that actual GDP will move out by a lot less than potential GDP. So for example if you've got a smokestack that you can run 8 hours a day with strict carbon regulations and then the carbon regulations ease and you can run it 16 hours a day, you don't need to do additional investment because you've got the capital stock already there.","offset":1392,"duration":24},{"text":"Governor Miran: You've got the smokestack, it's just that you can run the smokestack more hours a day. And so that's a case in which potential GDP goes up I think by a lot more than actual GDP. The amount of supply you can produce has gone up by a lot but the amount of demand has not gone up by a lot because all you've done is ease ease production constraints, you haven't increased a lot of investment demand.","offset":1416,"duration":18},{"text":"Governor Miran: AI, I don't know. Uh AI could be somewhere in between. So certainly AI creates a huge amount of investment demand in the form of uh you know GPUs in data you know in data centers. A lot of the GPU demand I think gets leaked overseas. You know a lot of the GPUs are not they're not made in the United States, right? Uh certainly data center demand does lead to investment activity in the United States.","offset":1434,"duration":25},{"text":"Governor Miran: Uh certainly we pay a lot of of of employee compensation to people who are working on on developing AI, integrating AI into into existing company workstreams. Um but where does it shake out on potential GDP versus actual GDP? I don't really have a a firm view.","offset":1459,"duration":18},{"text":"Host: So I want to shift gears here into the heart of what we're truly here for this conference, which is digital assets and and your perspective on them. And I want to start with this introduction of these skinny master accounts that have been begun rolling out, we've seen Kraken get approved for one. And so I would just love to get your perspective on how you think about the role of these skinny master accounts with respect to where it sits in comparison to a full-fledged master account.","offset":1477,"duration":25},{"text":"Governor Miran: Sure, so this this ties into the previous conversation nicely because we were talking about productivity growth and we were talking about technological advancements. And if you look over the very very long term of human history, it is technological advancements that drive all of all of the growth in human prosperity that we've experienced.","offset":1502,"duration":16},{"text":"Governor Miran: Um, and I do and and I think that's true of a wide variety of technological advances and I think that financial innovation is an important part of that. Because financial innovation and and advances in financial technology and financial capabilities help to allocate capital to where it needs to be to make the economy produce efficiently, produce more and and generally drive human prosperity.","offset":1518,"duration":22},{"text":"Governor Miran: So I do think that financial innovation is important too. Um, I think that introducing these skinny master accounts for stablecoins will be uh will be an important step uh in the direction of of allowing that type of innovation to occur. The Federal Reserve recently put out a request for information for comments on skinny master accounts and we received a large volume of these comments.","offset":1540,"duration":27},{"text":"Governor Miran: The staff are going through the comments now. Uh, I've I've I've looked at a few of them a few of the comments. Some of things that stuck out at me were things like ACH access and um caps on and and caps on the the balances uh the size of the of the skinny master accounts. Um but this is an area of of this is an area of of active examination and and active rulemaking.","offset":1567,"duration":23},{"text":"Governor Miran: And so you know it is it is something that is moving ahead. I'm excited for Governor Waller who leads the payments committee to put uh to sort of to push this to next steps and and I think it's got a lot of potential.","offset":1590,"duration":11},{"text":"Host: The other big trend that we're seeing is of course around stablecoins. You had a landmark speech about stablecoins recently. And I would love to just hear about how you're evolving your thinking there and its role within the broader financial system, where you see it being incorporated, where you see think it complements what already exists there and yeah just how you're thinking about that.","offset":1601,"duration":20},{"text":"Governor Miran: Thanks, so I gave a speech in November, I think. About stablecoins. And and you know I I made a couple of arguments about stablecoins in that speech. Um the major argument that I made was that if you've got uh G-SAX compliant stablecoins, um they help you they help facilitate digital payments.","offset":1621,"duration":28},{"text":"Governor Miran: But from a savings pool of capital perspective in the United States, in Europe, in places that already have access to dollar denominated savings accounts, dollar denominated money market funds, treasury bills, if you have a system with with open capital- and open capital markets, from a savings perspective stablecoins don't I think add as much.","offset":1649,"duration":26},{"text":"Governor Miran: From a payments perspective they do because they're facilitating digital payments. But if you've got a huge pool of capital, I don't know that stablecoins are adding are adding that much. Now that's not true in places with capital controls and it's not true in places where the banking system struggles to penetrate because of geography or development, right?","offset":1675,"duration":21},{"text":"Governor Miran: And so you've got large parts of the world where people are living behind capital controls where if they wanted access to dollar savings instruments like dollar deposits, treasury bills, money market funds, they don't have access- they they don't have the capacity to do so because the country they're living in, the law is you just can't move your money into dollars, we're not going to let you.","offset":1696,"duration":18},{"text":"Governor Miran: And it doesn't matter how bad the people want access to dollars, they're just not allowed to. There are other parts of the world where it's very rural and there may not be banking services. And maybe people have a cell phone and so they, you know have a satellite link on their cell phone but they have no access to actual banking banking services.","offset":1714,"duration":17},{"text":"Governor Miran: Or the banking services in the country are too unreliable and volatile and or there maybe too much inflation and they don't want to use the banking services. So my perspective is that is that I'm very optimistic about stablecoin growth. But I think that a lot of the stablecoin uptake is actually going to come from large volumes of money that want to be denominated in dollars, that want to sit in dollars, and are currently unable to sit in dollars, right?","offset":1731,"duration":30},{"text":"Governor Miran: Huge pools of savings that have no other way of getting into the into the dollar system suddenly there's a way of doing it. And of course you still need to get onto the crypto ecosystem to do that so there is still an entry wheel issue but I think it makes the- I think it makes the problem easier. And I I sort of think of it a bit like, you know a ride-share app sort of being a new technology that broke up the monopoly of a taxicab medallion.","offset":1761,"duration":23},{"text":"Governor Miran: It's that type of thing that sort of that creates that ability to sort of start circumventing barriers to dollar deposits that people didn't have access to before. Now of course tying this back to neutral rate that we were discussing before, if you have huge inflows from the rest of the world into US dollar denominated savings, that's going to weigh on the neutral rate, right?","offset":1784,"duration":19},{"text":"Governor Miran: This is what happened in the late 90s and early 2000s, uh what former chairman Ben Bernanke called the global savings glut. Um if we hit the more optimistic projections of stablecoin growth, you could be looking at at magnitudes that are that are, you know maybe not quite as big as the global savings glut but let's say half as big.","offset":1803,"duration":20},{"text":"Governor Miran: So you know there is the scope for these to matter uh you know very substantially for monetary policy as well, which of course would be a very, you know which would be a very powerful force weighing on interest rates, keeping them lower.","offset":1823,"duration":12},{"text":"Host: Yeah, I completely agree that I I think a lot about stablecoins as being this this huge tailwind for the rest of the world to be able to gain entry to the dollar system. I'm curious how do you think about the other side of the equation, which I think goes understated, which is tokenized deposits? What do you think about those?","offset":1835,"duration":16},{"text":"Governor Miran: Yeah, so tokenized deposits strike me as a and to be clear I have not made a I have not made an extensive study of tokenized deposits in particular, but what I know about them, which is probably less than you do, um is that they strike me as an improve- an improvement on services that are already being offered by banks, right?","offset":1851,"duration":22},{"text":"Governor Miran: Um, is that something that um is that something that ultimately ends up revolutionizing the banking system? Um, I don't know, but this tokenized deposits strike me as as, you know another step in a long line of improving the financial services that that banks offer um by by utilizing technology. But I haven't made an extensive study of it and I would be open to changing my mind based on things you tell me.","offset":1873,"duration":27},{"text":"Host: Yeah we'll have to have you back again for another conversation on that one but about that. Um just for for the folks out there who are core to the crypto industry and you know potential founders etc that are working towards this this huge, you know tailwind that is going on of financial innovation, we'd just love to hear any sort of parting words to those that are trying to build and innovate in the space in in the US financial system of, yeah just your final words to them.","offset":1900,"duration":25},{"text":"Governor Miran: Uh so I'll repeat what I said before which is that innovation is the driver is the main driver of long-run human prosperity. So if you are working on innovation thank you, um for for doing what you do. Um and with respect to issues in payments and payments technologies, you know when the Federal Reserve makes policy we we follow the Administrative Procedure Act which is what all regulatory agencies have to do and we issue uh we issue, you know sort of notices of proposed rulemaking, we issue requests for information.","offset":1925,"duration":36},{"text":"Governor Miran: Respond to those, give us comments. You know we we search for comments from industry, from stakeholders, from innovators so that we can know whether the regulations are doing the job that they are supposed to or where they need to be pushed or pulled to get them into a place to make the economy more efficient. So you know we we put out these notices, um you know let us let us know what need- you know let us know what needs changed to make the economy more efficient.","offset":1961,"duration":20},{"text":"Host: Incredible. Well uh can't thank you enough for coming here and talking at the Digital Assets Summit Governor Miran, that was incredible. Thank you.","offset":1981,"duration":10},{"text":"Governor Miran: Thanks for having me.","offset":1991,"duration":15}],"logs":[{"elapsed":"0.0","message":"Downloading audio from YouTube...","detail":null},{"elapsed":"0.0","message":"Trying download with browser cookies (ad-free)...","detail":null},{"elapsed":"4.2","message":"⚠ Cookie download failed: WARNING: [youtube] [jsc] Error solving n challenge request using \"deno\" provider: Error running deno process (returncode: 1): \u001b[0m\u001b[1m\u001b[31merror\u001b[0m: Uncaught (in promise) TypeError: Cannot read prope","detail":null},{"elapsed":"4.2","message":"Retrying without cookies...","detail":null},{"elapsed":"22.9","message":"⚠ Downloaded without cookies — audio may contain ads","detail":null},{"elapsed":"22.9","message":"Audio downloaded (19.2 MB) in 22.9s","detail":"File size: 19.2 MB"},{"elapsed":"22.9","message":"Video title: Fed Governor Miran on Why Inflation Fears Are Overstated","detail":null},{"elapsed":"23.0","message":"Audio duration: 33:17 (33.3 min)","detail":null},{"elapsed":"23.0","message":"Uploading audio to Gemini File API...","detail":null},{"elapsed":"26.6","message":"Audio uploaded in 3.6s","detail":"File ref: files/l55u76lj6x8j"},{"elapsed":"26.6","message":"Audio processed in 0.0s. 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