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OPEN-SOURCE SCRIPT

Taylor Rule

By Pinnacle_Investor
Updated
The Taylor rule is a simple formula that John Taylor devised to guide policymakers. It calculates what the federal funds rate should be, as a function of the output gap and current inflation. Here, we measure the output gap as the difference between potential output and real GDP. Inflation is measured by changes in the CPI, and we use a target inflation rate of 2%. We also assume a steady-state real interest rate of 2%.
Release Notes
Updated
Release Notes
Set your chart timeframe to 3 months (quarterly), otherwise the values are completely wrong.
Release Notes
Moving Average
Release Notes
Now works on all timeframes
CPIfedforecastingFundamental AnalysisinflationinterestRATErulestatisticstargettaylortaylors

Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.

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