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MNI BRIEF: Fed's Logan: No Need To Slow QT; Eyes Price Signals


The Federal Reserve is not close to the point where it will need to slow or stop its balance sheet normalization, and money market price volatility could offer signals when QT may be nearing an end, Dallas Fed President Lorie Logan said Friday.

"As we look at normalizing the balance sheet the price signals are a good place to start that conversation," she said in Q&A at an ECB conference after giving a speech defending the Fed's "ample reserves" approach to monetary policy implementation. "Having repo rates close to IORB but stable suggests to me a good normal place to be." (See: MNI INTERVIEW: Reserve Scarcity Yet To Materialize - Fed Econ)

"If we started to see volatility in that repo rate, just below or just at, then I would think you're getting to a position where the market is fragile and vulnerable to those potential shocks," said Logan, the Fed's former manager of its System Open Market Account.

MNI Washington Bureau | +1 202-371-2121 |
MNI Washington Bureau | +1 202-371-2121 |

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