Incorrect! The actual federal funds rate in 2012 was 0.1% while the estimated target rate was 1.75%. In 2015, the actual federal funds rate was 0.4% while the estimated target rate was 0.7%. In 2015, the actual federal funds rate was much closer to the target rate using the Taylor rule. The main reason is that inflation fell in 2015, which justified a lower federal funds target rate to stimulate economic growth.
For further review, see section “The Federal Funds Target and the Taylor Rule” (please link to section in the ebook).
Correct! The actual federal funds rate in 2012 was 0.1% while the estimated target rate was 1.75%. In 2015, the actual federal funds rate was 0.4% while the estimated target rate was 0.7%. In 2015, the actual federal funds rate was much closer to the target rate using the Taylor rule. The main reason is that inflation fell in 2015, which justified a lower federal funds target rate to stimulate economic growth.
For further review, see section “The Federal Funds Target and the Taylor Rule” (please link to section in the ebook).