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Themes Monetary policy
Briefing · Monetary policy

What the Taylor rule says about the Fed reserve policy rate now

A 33-year-old formula is still the benchmark for judging interest rates, and today it points above the Fed's 3.75 to 4% under five of the six versions I tested. The reasons the Fed has not followed it are as informative as the rule itself.

Zoran Ninic CFA EMBA MSc · 13 min read · 11 October 2026
Line chart of the US federal funds rate against the range prescribed by the Taylor rule from 2000 to 2026. The Fed sat below the rule in 2003 to 2005, far below it in 2021 to 2023, and slight
Sources: Federal Reserve; BEA; BLS; CBO; Aurelian Review calculations.
ContextFrameworkEvidenceInterpretationImplication
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