Logan: The Federal Reserve should abandon the federal funds rate and switch to the Treasury-collateralized overnight rate

According to Golden Ten Data, Dallas Federal Reserve President Logan stated that the Federal Reserve should abandon using the federal funds rate as the benchmark for implementing monetary policy, and instead consider an overnight rate linked to the U.S. Treasury collateralized lending market. She believes that the federal funds rate target is outdated, and the connection between the interbank market and the overnight money market is fragile and could break suddenly. Logan pointed out that the Tri-Party General Collateral Rate (TGCR) could bring the most benefits, as TGCR covers over $1 trillion in transactions daily, while the federal funds market currently averages less than $100 billion in trading volume.