Source: https://fred.stlouisfed.org/

Tools used: Excel

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For those not economically inclined: Fed funds rate is the target interest rate for fed. When you hear the news saying fed is raising rates. they mean fed funds rate. Fed funds rate is the US interbank overnight rate. Taylor rule is a mathematical rule stating what the interest rate should be in order to reach the targeted inflation rate.

You're missing the last several months, during which the gap has closed about halfway.

Yeah I was a bit lazy since the data from fred didn't have newest numbers.

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That's convenient!

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Nothing beautiful about it

I searched the source for "Taylor rule" but did not get a result that applied to this graph.

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Can you please provide more info on the Taylor rule? I wasn't able to find it on fred.

Taylor rule ineterst rate is not published by any party, you have to calculate it yourself from several different statistics, all of which are available from source.

It's not something that is published, you have to calculate taylor rate yourself from inflation and output data. Those data can be found on Fred database. You can find the exact taylor rule on Wikipedia.

I don't disagree..

There is a graph on FRDSTL that looks identical to the OP's. It show the formula for calculating the Tayor rule.

https://fredblog.stlouisfed.org/2014/04/the-taylor-rule/

What is the goal under the Taylor rule? The ideal interest rate would be a lot different if they wanted to ensure the bank’s mortgages didn’t lose value vs promoting economic growth.

Price stability. It really just suggests what the nominal rate should be in order to reach the inflation target. In this analysis I assumed target to be 2%. BTW taylor rule has actually approximated actual fed monetary policy quite well in the past.