Wall Street Strategists Split Over Potential Fed Policy Rate

Wall Street strategists are divided on what to replace the federal funds rate with should the Federal Reserve decide to abandon the long-used policy target following remarks from a central bank official.

Lorie Logan, president of the Federal Reserve Bank of Dallas, last week proposed replacing the federal funds rate with a more widely used bellwether tied to the market for repurchase agreements, the Tri-Party General Collateral Rate (TGCR). Analysts have long complained that the Fed’s current benchmark no longer reflects the transmission of monetary policy to the broader economy.