If the Fed followed the Taylor rule, unemployment would be higher and inflation lower, Federal Reserve Board Chair Janet Yellen said Tuesday.
Processing Content
Under the Taylor Rule, Yellen said, the Fed funds rate target would be 3.5-4%, "obviously much higher" than what the Federal Open Market Committee deems appropriate.
The economy would be weaker "if we followed the dictates" of the Taylor Rule, or similar formulas, she said. Unemployment would be higher and "inflation would be lower than it is now."
