Logan says FOMC should cut ties with federal funds rate
Dallas Fed chief says repo markets are better alternative to ‘outdated’ target
The Federal Open Market Committee (FOMC) should move away from targeting the federal funds rate, Lorie Logan, president of the Federal Reserve Bank of Dallas, argued on September 25.
Logan, who was speaking at a workshop organised by the Federal Reserve Bank of Richmond, said targeting the rate currently allowed the FOMC to effectively control broad money conditions. However, the connections between the rate and broad money conditions were “fragile and could break suddenly”.
“The FOMC should
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