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Federal Reserve Board of Governors

Accessible Version


Three Policy Paths: An Illustrative Exercise

 

        Unemployment Rate
Percent
Period Baseline Optimal Policy Modified Taylor Rule
2011Q1 8.991 8.991 8.991
2011Q2 9.068 9.068 9.068
2011Q3 9.062 9.062 9.062
2011Q4 8.712 8.712 8.712
2012Q1 8.241 8.241 8.241
2012Q2 8.173 8.173 8.173
2012Q3 8.053 8.053 8.053
2012Q4 8.100 8.101 8.099
2013Q1 8.050 8.032 8.063
2013Q2 8.000 7.947 8.037
2013Q3 7.950 7.850 8.020
2013Q4 7.900 7.747 8.007
2014Q1 7.825 7.614 7.971
2014Q2 7.750 7.482 7.935
2014Q3 7.675 7.350 7.897
2014Q4 7.600 7.221 7.858
2015Q1 7.450 7.020 7.740
2015Q2 7.300 6.823 7.619
2015Q3 7.150 6.631 7.495
2015Q4 7.000 6.441 7.368
2016Q1 6.850 6.255 7.236
2016Q2 6.723 6.098 7.121
2016Q3 6.614 5.966 7.019
2016Q4 6.522 5.860 6.928
2017Q1 6.444 5.780 6.844
2017Q2 6.377 5.725 6.766
2017Q3 6.321 5.692 6.694
2017Q4 6.272 5.680 6.626
2018Q1 6.232 5.686 6.563
2018Q2 6.197 5.707 6.503
2018Q3 6.167 5.740 6.447
2018Q4 6.142 5.780 6.396

        PCE Inflation
4-quarter percent change
Period Baseline Optimal Policy Modified Taylor Rule
2011Q1 1.806 1.806 1.806
2011Q2 2.557 2.557 2.557
2011Q3 2.824 2.824 2.824
2011Q4 2.543 2.543 2.543
2012Q1 2.362 2.362 2.362
2012Q2 1.637 1.637 1.637
2012Q3 1.850 1.850 1.850
2012Q4 1.800 1.870 1.735
2013Q1 1.825 1.953 1.705
2013Q2 1.850 2.044 1.667
2013Q3 1.875 2.139 1.625
2013Q4 1.900 2.167 1.643
2014Q1 1.925 2.208 1.651
2014Q2 1.950 2.243 1.665
2014Q3 1.975 2.272 1.683
2014Q4 2.000 2.298 1.704
2015Q1 2.000 2.297 1.702
2015Q2 2.000 2.293 1.702
2015Q3 2.000 2.287 1.703
2015Q4 2.000 2.280 1.705
2016Q1 2.000 2.270 1.709
2016Q2 2.000 2.260 1.713
2016Q3 2.000 2.250 1.718
2016Q4 2.000 2.240 1.725
2017Q1 2.000 2.230 1.733
2017Q2 2.000 2.220 1.743
2017Q3 2.000 2.209 1.755
2017Q4 2.000 2.196 1.769
2018Q1 2.000 2.181 1.785
2018Q2 2.000 2.163 1.802
2018Q3 2.000 2.142 1.820
2018Q4 2.000 2.118 1.840

        Federal Funds Rate
Percent
Period Baseline Optimal Policy Modified Taylor Rule
2011Q1 0.157 0.157 0.157
2011Q2 0.093 0.093 0.093
2011Q3 0.083 0.083 0.083
2011Q4 0.073 0.073 0.073
2012Q1 0.103 0.103 0.103
2012Q2 0.153 0.153 0.153
2012Q3 0.146 0.140 0.140
2012Q4 0.125 0.160 0.125
2013Q1 0.125 0.150 0.125
2013Q2 0.125 0.134 0.125
2013Q3 0.125 0.119 0.125
2013Q4 0.125 0.110 0.125
2014Q1 0.125 0.105 0.125
2014Q2 0.125 0.104 0.125
2014Q3 0.125 0.110 0.125
2014Q4 0.125 0.119 0.125
2015Q1 0.125 0.131 0.125
2015Q2 0.125 0.147 0.316
2015Q3 0.361 0.166 0.564
2015Q4 0.607 0.191 0.822
2016Q1 0.861 0.229 1.091
2016Q2 1.115 0.308 1.327
2016Q3 1.364 0.492 1.538
2016Q4 1.602 0.762 1.732
2017Q1 1.829 1.089 1.912
2017Q2 2.041 1.444 2.082
2017Q3 2.239 1.806 2.245
2017Q4 2.421 2.157 2.401
2018Q1 2.589 2.481 2.552
2018Q2 2.741 2.770 2.697
2018Q3 2.880 3.017 2.836
2018Q4 3.005 3.217 2.969

Source: Federal Reserve Bank of New York, Survey of Primary Dealers, September 2012.
* The data on this page has been revised since its original release.

 

Last update: August 2, 2013