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Higher Or Lower Interest Rates?

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The Taylor Rule is a tool to predict the Fed policy on interest rates.

Here is a great article on how to predict what the Fed is going to do.  I don't think it is an exact science but I do think it is a great gage of whether the Fed will raise or lower the rate.  The Taylor Rate is an equation that uses both a combination of inflation with how the economy is doing.  You get a graph that follows closely with the Federal Funds Rate for the last several decades.  You will see that there is a sign that they need to compensate for the upswing in the "Taylor Rate".  As you know the stock market doesn't take kindly to raising interest rates.  So watch your investments closely.  See the following article on the Taylor Rule.

The Taylor Rule



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