2026 Jackson Hole Economic Policy Symposium Explores Financial Innovation, Centers Instant Payments

The rapid evolution of the U.S. payments system is shaping the future of currency, banking, monetary policy and global financial integration. This dynamic drove conversation at the Federal Reserve Bank of Kansas City’s 2026 Jackson Hole Economic Policy Symposium.

The annual symposium brings together central bankers, Federal Reserve officials, policymakers and academics from around the world to discuss issues affecting the global economy. The theme of this 49th meeting, “Financial Innovation: Implications for Payments and Policy,” focused on how technological advancements are redefining financial intermediation and payments.

Chairman Warsh outlines his monetary policy tenets

The symposium kicked off Friday morning with opening remarks from Federal Reserve Chairman Kevin Warsh. He addressed AI’s influence on capital and labor, the interaction between the central Bank and financial markets, his key principles for conducting monetary policy and a general assessment of today’s economy.

He said he was impressed with the economy’s overall strength but expressed concern with inflation running above the Fed’s 2% target.

“We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed,” Warsh said. “Otherwise, we have work to do.”

Warsh added that he was committed to constructing more reliable models and robust rules, improving the Fed’s forecasting and basing policy decisions on the latest economic data rather than on previous guidance. (Warsh’s full presentation is available at External LinkYouTube.com/KansasCityFed; a transcript is External Linkhere.)

Jackson Hole participants discuss the tech and tools behind their work

Top researchers, economists and other financial experts External Linkdelivered papers and commentaries and led panel discussions exploring how recent innovations such as digital payments systems, instant payments, cryptocurrencies and stablecoins have affected existing financial infrastructure. Speakers and panelists shared insights on embracing these innovations while strengthening financial markets and regulatory frameworks.

The Federal Reserve Banks play a critical role in processing and facilitating the transfer of $5 trillion to $10 trillion in payments each day. One innovation meant to further streamline such transactions is the Federal Reserve’s FedNow system. The system allows participating banks and credit unions to send and receive payments 24 hours a day, 365 days a year, unlike traditional payment systems that may take longer to process. Faster payments can give workers quicker access to their earnings, allow consumers to settle payments sooner and help improve cash flow for both large and small businesses.

Kansas City Fed President Jeff Schmid touts instant payments

On Wednesday, just ahead of the symposium, Kansas City Fed President Jeff Schmid discussed the importance of instant payments and financial innovation with national media outlets, including CNBC, Fox Business, Bloomberg and Yahoo Finance.

In an interview with CNBC, Schmid explained how changes in the payments system and advances in technology can influence monetary policy.

“I think it’s going to be completely transformative and, I think, potentially disruptive,” he said.

The shift toward faster payment settlement could also affect how financial institutions manage liquidity, a challenge Schmid said could become a priority as technology and artificial intelligence (AI) evolve.

“You’re hearing things like ‘atomic settlement’ coming out of the market,” Schmid said. “What that means is, every payment is going to go absolutely instantaneous—not only instantly collected but also instantly reconciled.”

Jackson Hole speakers, panelists delve into innovation specifics

Papers offered during the symposium examined this year’s topic from several perspectives.

• Eswar Prasad, professor at Cornell University, looked at financial innovation and its implications for the international monetary system.
• Darrell Duffie, professor at Stanford University, presented research on tokenized finance and its implications for the financial system.
• Christine A. Parlour, professor at the University of California, Berkley, explored how financial innovation is shaping the future of banking.
• Markus K. Brunnermeier, professor at Princeton University, discussed AI and how it and other evolving technology will influence economic growth and the financial system.

The weekend also featured panel discussions on the evolution of payments innovation and its impact on the global financial system as well as the role of new developments in central banking.

For more information about the Jackson Hole Economic Policy Symposium, including papers, presentations and other materials from economists and academics who participated, visit the Kansas City Fed’s website.