S&P Cotality Case-Shiller Index Reports Annual Gain in December 2025

Thank you, President Collins, and thank you for the opportunity to speak to you today. Artificial intelligence is a technological phenomenon that is taking the world by storm. We read about it every day and many of us have used it in some way or another. In my lifetime, I have never seen a technological revolution like this—and I have seen the birth of space exploration, the rise of the personal computer, the explosion of the internet and then smartphones. While all transformative, none match the potential that AI has in changing our lives and doing so at breathtaking speed. Firms, households, and every government are all trying to incorporate it into the way they function and operate. And I am here to tell you that the Federal Reserve is no different. So, given the theme of this conference and the audience makeup, I felt this was a good time to discuss how the Federal Reserve System is using artificial intelligence to build and optimize the systems that support our work, as well as embedding it into other internal applications. Now most people associate the Federal Reserve with monetary policy—interest rates, inflation, and the decisions that make headlines when Fed officials meet eight times a year. But the bulk of our daily activity is doing operational work such as payments, financial management, human resources, and providing financial services to the U.S. Treasury. A critical element of this operational work is technology. AI is the latest technology that we are building into our daily work to achieve operational efficiencies. The Fed was designed in 1913 as a system of regional bank ? FED’S WALLER DOES NOT COMMENT ON MONETARY POLICY, ECONOMIC OUTLOOK ? FED’S WALLER: FED ADOPTING A SYSTEM-WIDE APPROACH TO DEPLOYING AI TECHNOLOGY ? FED’S WALLER: FED IS BEING VERY CAREFUL INTEGRATING AI INTO OPERATIONS

White House official: Trump administration is working to change new temporary United States tariff rate to 15% from 10% published by Customs and Border Protection. WHITE HOUSE OFFICIAL SAYS 'NO CHANGE OF HEART' ON TRUMP'S PLAN FOR 15% TARIFF RATE UNDER SECTION 122 STATUTE, TIMING OF CHANGE TO 15% UNCLEAR

BoE Gov. Bailey: I will go into the coming meetings asking whether a cut is justified BANK OF ENGLAND'S BAILEY: WE DO EXPECT INFLATION TO RETURN TO CLOSE TO TARGET IN APRIL Bailey: Report to the Treasury Committee In the 15 months since my last report to the Treasury Committee in November 2024, monetary policy has had to navigate an increase in headline inflation against the backdrop of continuing underlying disinflation. To ensure a sustainable return of inflation to the 2% target, monetary policy has been set to balance, on the one hand, upside risk to inflation from lingering persistence in domestic inflationary pressures stemming from the big inflationary shocks of recent years, and downside risks to inflation from subdued economic growth and a weakening labour market on the other. Gradual progress on underlying disinflation and receding risks from prolonged cost pressures have allowed the Monetary Policy Committee (MPC) to cut Bank Rate four times, from 4.75% in November 2024 to 3.75% today. Twelve-month inflation in the Consumer Price Index (CPI) was 3.4% in the latest data for December 2025, up from its most recent trough of 1.7% in September 2024 – the latest datapoint at the time of my previous report – but down from a peak of 3.8% in July, August and September 2025. Looking ahead, Bank staff expect CPI inflation to decline further to about 3% in January, February and March this year, before reaching a level close the 2% target from April. In the latest Monetary Policy Report (MPR) from February 2026, in the central case, inflation is then projected to stay close to the 2% target for the r BOE'S BAILEY SAYS EXPECT TO SEE SCOPE FOR SOME FURTHER EASING OF POLICY, PROBABLY DURING THIS YEAR ... BOE'S BAILEY: RATE CUT AT NEXT MEETING IS A GENUINELY OPEN QUESTION

This report covers the period from February 2025 to February 2026. I began this period believing that the overall trend of disinflation towards our target continued and so some further removal of monetary policy restrictiveness was likely to be appropriate. My subsequent voting record reflects my view that there have been two-sided risks to our central projection, but that the risk of inflation persistence has outweighed that of weaker demand over the past year. My voting record also reflects the high importance I have placed on ensuring inflation returns sustainably to target given we are now in the fifth year of inflation remaining significantly above 2%. In this rate cutting cycle, my monetary policy strategy has been one of risk management, in which I have weighed the costs of maintaining too much versus too little restrictiveness. I believe the cost of the latter is greater. Generally, the data over this period has suggested the disinflation process continued. The data has also shown the UK real economy to be more resilient than forecast (in year-on-year terms, particularly in the first half of 2025), though consumption had remained subdued and the labour market had loosened slightly more than we’d expected. I voted to cut Bank Rate last May, but then - given subsequent reductions in Bank Rate - voted to hold Bank Rate to ensure monetary policy remai BOE'S GREENE: DISINFLATION PROCESS MAY BE STALLING. BoE's Greene suggests slowing the pace of interest rate cuts is appropriate