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06.01.22

Update on Fed Funds Rates Based on 7 Simple Monetary Policy Rules: Cleveland Fed

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Our tool also allows users to customize their own simple policy rule and forecast

Looking at the federal funds rates coming from seven simple monetary policy rules and three economic forecasts -- based on data and forecasts available as of May 31, 2022, the median federal funds rate across seven policy rules and three economic forecasts rises from 3.91 percent in 2022:Q2 to 4.08 percent in 2024:Q2.

Simple monetary policy rules provide a relationship between a central bank’s policy rate and a relatively small number of indicators of inflation and real economic activity. Monetary policymakers often use simple policy rules, like the Taylor rule, as an input into their decision-making. However, there are many different simple rules, and there is no agreement on a single "best" rule. The chart below highlights differences among the latest funds rates coming from the simple policy rules and forecasts examined by Cleveland Fed researchers.

The Cleveland Fed’s webpage, Simple Monetary Policy Rules, presents detailed results from the researchers’ analysis and a spreadsheet so users can customize their own simple monetary policy rule and forecast. The results are updated quarterly, and users can receive e-mail notifications when the updates are posted. Subscribe here.

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia. For more information, go to www.clevelandfed.org or follow us on Facebook, Twitter, Instagram or LinkedIn.

Upcoming EventsSEE ALL

  • 09.15.22

    FedUniversity: Internships at the Federal Reserve Bank of Cleveland

    Join us on September 15, noon to 1:00pm, to learn about the Cleveland Fed’s annual internship program.

  • 09.29.22

    Inflation: Drivers and Dynamics 2022

    Inflation: Drivers and Dynamics 2022, co-sponsored by the Center for Inflation Research and the European Central Bank will take place on September 29-30, 2022 in Cleveland, OH.

  • 10.06.22

    Conference on Real-Time Data Analysis, Methods, and Applications

    The Federal Reserve Bank of Cleveland is sponsoring the Annual Conference on Real-Time Data Analysis, Methods, and Applications in Macroeconomics and Finance to be held in Cleveland, Ohio, at the Cleveland Reserve Bank on Thursday and Friday, October 6–7, 2022.

  • 11.07.22

    Women in Economics Symposium

    Join the Federal Reserve Bank of Cleveland at the Women in Economics Symposium, which aims to encourage women to pursue a career in economics by discussing the successful career paths of diverse economics professionals and raising awareness of diversity and inclusion in the profession.

  • 11.17.22

    2022 Financial Stability Conference: Frontier Risks, a New Normal, and Policy Challenges

    The Federal Reserve Bank of Cleveland and the Office of Financial Research will host their 10th annual financial stability conference on November 17–18, 2022. This year’s conference is titled Financial Stability: Frontier Risks, a New Normal, and Policy Challenges.