Furthermore, the Fed would like
to adhere
to the so - called «Taylor Rule» (in spite of Professor Taylor's protestations that it is misinterpreting and misusing his concept), a mathematical construct that purports
to make monetary policy more «scientific» by establishing an arithmetic rule for varying the administered interest rate according
to the variance of «actual from target inflation» (note that «inflation» refers
to the
change in a price index in this case, not the phenomenon of inflation of the money supply as such), as well as the variance of economic output from «
potential output» (i.e, the so - called «output gap» is incorporated in the
formula as well).