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).