Fed policy "review" - What has not been openly discussed?

The Fed is undergoing an internal policy review that should be released sometime in mid-year, but there has been a number of editorials and discussions in newspapers, and Fed speeches on what should be adjusted or changed with policy. 

Clearly, there has been talk about adjusting the 2% inflation target. Those policy changes have ranged from widening the goal, overshooting the inflation target, nominal GDP targeting or dropping the target all together. There has been talk about improving forward guidance and increasing the tools available for monetary policy. The tools have ranged from the near-term adjustments to the repo market to alternative forms of quantitative easing. There has been talk about improved systemic risk management as well as further regulation of banks, yet one area that has not been discussed is the international role of the Fed.

The elephant in the room is that the world is still dominated by the dollar, so any changes in the Fed's balance sheet and interest rates do not just impact the US but have a deep and meaningful impact all over the world. With an increasing amount of global debt often financed in dollars, US interest rates are all the more important to global borrowers. This Fed importance to international growth and capital markets has not appreciable diminished this century.

Look at the last financial crisis and one will see that the swap lines provided by the Fed to the rest of the world were meaningful. Look at repo financing by foreign central banks or foreign bank Us operations, and we will see a large global impact. In spite of the increased size of emerging market local financing, the dollar flows still matter for EM funding and hedging. Simply put, the Fed is the central bank for the world and actions taken to raise or lower rates, to provide forward guidance, to overshoot inflation targets, or change their balance sheet will have ramifications across the globe. 

A policy review that does not address how the Fed works with the rest of the world misses a critical issue for policy review. However, this is the topic that will not be openly discussed because it will cause Congress and the President to interject their views with this serious discussion of what should be the international role of the Fed versus its domestic policy goal obligations. There is nothing wrong with this involvement except that is not clear where the Congress and the President stand on this issue. Monetary policy statecraft is an arcane and complex topic that does not focus directly on the citizen constituents of the Fed. For global investors, there is no topic that could be more important, yet it is not on the forefront of any discussion.