The chart compares the federal funds rate with the rate Taylor's (1993) rule gives in each quarter since 1960. Move the sliders to change the equilibrium real rate, the inflation target or the weights, and switch the inflation measure. Tap or hover on the chart to see the numbers for any quarter.
Inflation is the change in prices over the previous four quarters, measured with the GDP deflator, as in Taylor (1993), or with core PCE prices, which the Fed uses to gauge underlying inflation. The output gap is the percent difference between real GDP and the Congressional Budget Office's estimate of potential output; Taylor measured it against a trend. The rule is not bounded at zero. Data from FRED, through 2026 Q2.
Try a weight of 1 on the output gap, a common variant, and compare what the rule says in 2009 and 2020.