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Simple Monetary Policy Rules




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Update Schedule

Next anticipated update: March 1, 2019

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The Federal Reserve Bank of Cleveland provides federal funds rates from seven simple monetary policy rules based on three sets of forecasts for economic conditions, along with tools to help you customize your own simple policy rule.

Simple monetary policy rules typically provide a relationship between the central bank’s policy rate—which, for the United States, has been the federal funds rate target—and a relatively small number of indicators on real economic activity and inflation. Monetary policymakers often compare and contrast the federal funds rates implied by different simple monetary policy rules, use simple rules as an input in the decision-making process, and use simple rules to help communicate decisions to the public. (For one example, see here.) Examining a variety of rules is helpful because there is no agreement in the research literature on a single “best” rule, and different rules can sometimes generate very different values for the federal funds rate, both for the present and for the future. Looking across multiple economic forecasts helps to capture some of the uncertainty surrounding the economic outlook and, by extension, monetary policy prospects.

This page briefly reports and regularly updates the federal funds rates based on the simple monetary policy rules and forecast sources documented in the Economic Commentary, “Federal Funds Rates Based on Seven Simple Monetary Policy Rules.” An online appendix provides additional background.

Federal Funds Rates Based on Simple Monetary Policy Rules for a Given Forecast

Forecast Rule Date (YYYY.Q format)
SPF Taylor (1993) rule
Core inflation in Taylor (1999) rule
Inertial rule
Alternative r* rule
Forward-looking rule
First-difference rule
Low weight on output gap rule
CBO Taylor (1993) rule
Core inflation in Taylor (1999) rule
Inertial rule
Alternative r* rule
Forward-looking rule
First-difference rule
Low weight on output gap rule
FRBC BVAR Taylor (1993) rule
Core inflation in Taylor (1999) rule
Inertial rule
Alternative r* rule
Forward-looking rule
First-difference rule
Low weight on output gap rule
Summary Maximum
Median
Minimum