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The Federal Reserve is the American Central Bank. The US dollar is the payment rail on which the world economy
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operates. [music] The Federal Reserve is what makes all of the output of the US economy and indeed
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the global economy integrate [music] into a coherent financial system. Without the Fed, we don't have the
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dollar. Without the dollar, we don't have the global economy. The financial system in the United
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States at the beginning of the 20th century was [music] a backwater. It was crisis-prone, filled with tiny little
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banks that would fail as likely as succeed, and made it so that the businessmen and women of the early 20th
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century who sought to grow their markets and integrate [music] themselves into the global economy couldn't do so. The
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United States needed to grow up, financially speaking, and so created a new central bank, a new banking system,
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called the Federal Reserve System. If you were to pull out a $20 bill or any dollar bill, you'll see written on
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the top of it Federal Reserve Note. The Federal Reserve issues the nation's currency. Banks that manage your money
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are doing so attached [music] to the Federal Reserve System. Providing the right amount of money, not
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more, not less, is called monetary policy. It's the most important thing that the Fed does. The consequence of
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providing too much money is inflation. And the Federal Reserve exists in order to combat that temptation. When you have
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growth without inflation, anything is possible. [music] And we have entrepreneurs imagining a
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future and innovating into that future. When monetary policy is not running well, when we have inflation without
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growth, those options [music] evaporate. The consequence, we even have a word for
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that. It's called stagflation. What we have seen in the Federal Reserve's [music] 113-year
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history is extraordinary institutional resilience. The Federal Reserve [music] navigated through all of this, through
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the Great Depression, through the Cold War, through the [music] internet revolution in the 1990s. We are right
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now facing what I would regard as three principal challenges [music] for the Fed. The first is geopolitical
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uncertainty. The very polarity of the geopolitical world is shifting in a way that we have not seen since the end of
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the Cold War in the early 1990s. Number two is the AI revolution will affect every aspect of knowledge production.
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Will AI replace the central banker? How will AI change that policy making function? And the third is we're seeing
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the very revolution of what it means to be money, not only in the United States,
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but throughout the world. The US dollar is now the rail on which the global economy runs, and the Federal Reserve is
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its chief engineer. And yet even today, even in the midst of conflict and geopolitical uncertainty, even in the
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midst of technological revolutions and AI and crypto, the US dollar is still king.
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And in charge of the US dollar is the Federal Reserve.