I totally agree with you. That is exactly what we are trying to accomplish. Right now, we are testing an exponential weighted average, so that the most recent active swaps will count a lot more towards the next FRR than the one from an hour ago. This should make it more sensitive, and allow it to wander more freely. Ideally, instead of a stairway, it should hopefully be more like a slope.
It is kind of a big change, and it is something that has pretty far reaching effects, which is why we are being cautious.
Faster-moving is promising, although I'm a little worried that would just accelerate the current progress of "slow grind down until the wall is exhausted, then launch up". I'm not seeing how it would allow the wall to move up in the face of demand unless swaps from
above the wall are being taken for some reason.
Kinda have to cut the cord and stop setting the variable rate by reference to the fixed rates; the presence of the variable rate offers has too much influence on which fixed rate swaps are taken for that to be effective and not effectively self-referential.