Fed should scrap the Taylor Rule as policy guide: Kocherlakota

PHILADELPHIA (MarketWatch) - The Federal Reserve should scrap the famous Taylor Rule once and for all as a key benchmark for interest-rate policy because using it in the wake of the financial crisis led the Fed to make policy choices that kept both job growth and prices "needlessly low for years," said Narayana Kocherlakota, the president of the Minneapolis Fed, on Friday. Specifically, Kocherlakota said the Fed used the rule as a guide in November 2009 just after the Great Recession, and, as a result, it led them "to forgo the timely creation of hundreds of thousands-perhaps millions-of jobs ......(read more)

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