Overview
- Lorie Logan said on Thursday, July 9, 2026, that the Federal Open Market Committee could voluntarily route its repos and reverse repos through a central counterparty such as the Fixed Income Clearing Corporation (FICC).
- Logan said central clearing would reduce gross positions on dealer balance sheets through netting, which could lower intermediation costs and make the Fed’s standing repo facility more attractive for eligible firms.
- Supporters say the change could improve the Fed’s ability to provide liquidity and reinforce the Secured Overnight Financing Rate (SOFR) by concentrating transactions in a single clearing system.
- Critics and regulators warn that moving more Fed activity into one clearinghouse would concentrate operational and systemic risk in the central counterparty, a vulnerability the Financial Stability Board has repeatedly flagged.
- The call comes as the SEC’s phased mandate to centrally clear private cash Treasury and repo trades finishes by June 30, 2027, and market volumes have already shifted toward clearing ahead of that deadline.