Fed's Logan: Voluntary Central Clearing Would Aid Fed Open-Market Operations

Lorie Logan, President of the Federal Reserve Bank of Dallas and an FOMC voter in 2026, stated that conducting open-market operations through a voluntary central clearing mechanism could bring benefits to the financial system.

Speaking at a conference on market liquidity hosted by the Federal Reserve Bank of New York, Logan said that if the Federal Open Market Committee (FOMC) were to conduct open-market operations via central clearing on a voluntary basis, it would “be able to make its open-market operations more efficient and effective, and help enhance the overall resilience of U.S. financial markets.”

Logan also noted that leverage levels in the market need to be managed prudently. “Maintaining strong and efficient financial markets requires market participants and the official sector to strike an appropriate balance between the benefits and risks of leveraging, as well as the interaction between leverage and market liquidity.”