Fed Officials Weigh Rules-Based Policy That Stay Flexible

Federal Reserve officials are struggling to find consensus on a policy rule that’s predictable to investors yet flexible enough to adjust to shifts in the economy or markets.

Vice Chairman Janet Yellen and Philadelphia Fed President Charles Plosser this month said rules like one created by Stanford University’s John B. Taylor may help central bankers avoid the impression that they are improvising. “Setting monetary policy in a systematic or rule-like manner leads to better economic outcomes,” Plosser said in an April 12 speech.