Board of Governors of the Federal Reserve System

Rate Real Federal Funds Rate Percent Percent Taylor (1993) rule Taylor...Rate PCE Inflation Staff’s estimate of the natural rate Percent Four-quarter

REC'D IN RECORDS SECTION BOARD OF GOVERNORS DEC 11 1961 FEDERAL RESERVE SYSTEM WASHINGTON December 8, 1961 CONFIDENTIAL (FR) To: Federal Open

rate that reflects the expected path of the policy rate plus an appropriate...rate futures are only a pure measure of the - 5 - expected policy rate

rate. For rules that have a lagged policy rate as a right-hand-side variable...Rate Percent 7 Staff’s estimate of the natural rate 6 5 4 2014 2015 2016

Rates Percent Note: For rules that have the lagged policy rate as a right-hand-side...rates that lead to a notable undershooting of the natural rate of unemployment

rates in March (figure 4). Bank deposits surged as investors favored safe

rate. Rules that have the lagged policy rate as a right-hand-side variable...rate and the staff’s reassessment of where the inflation rate S tr at

rate from six different policy rules: the Taylor (1993) rule, the Taylor...rates to outperform headline inflation rates as predictors of the medium-term

rate is at a 50-year low. The labor force participation rate has been ...rate of interest—that is, the level of the federal funds rate that keeps

rates low in major developed economies to achieve their policy objectives...rates, as shown in the middle-right panel. Furthermore, measures to reduce