Federal Reserve (Fed) Bank of Dallas President Lorie Logan mused about making key policy adjustments at the Fed on Monday, stressing the need for more effective policy communication.

Key highlights

The US has more room to reduce reserves.
Responding to banks' increased short-run demand for reserves is a recipe for an ever-expanding central bank balance sheet.
As reserve levels drop, preferable for the Fed to seek to meet lower long-run bank demand for reserves rather than the higher short-run demand.
Fed balance sheet should hold primarily treasuries in the long run.
I was encouraged to see the use of the standing repo facility at the June quarter-end. I anticipate similar use in September if needed.
Periodic reviews give us systematic way to learn.
Clear we need a strategy that's robust to a range of environments.
The Fed communication could do more to convey range of views.
The Fed should explore ways to avoid overemphasizing the median view relative to the diversity of views at the Fed.
We should continue to look to see if optimal to continue to communicate a range for The Fed fund rate target.