BoE’s Bailey: AI Could Be a Positive Supply Shock Amid Negative Shocks

Bailey is framing AI as a supply-side offset to the energy-driven inflation problem, which matters because central banks have few tools against negative supply shocks. The caveat on energy pass-through — modest but early — implies the inflation risk is still building, not resolved, and that rate-holding becomes harder the longer prices stay elevated. For crypto and RWA markets, the read is indirect: AI's productivity narrative supports the same long-duration, tech-adjacent thesis that underpins tokenized real-world assets. Whether the supply-shock framing gains traction among other central banks is the open question.