FOMC watch: a Taylor rule approach to guide policy - Nomura

Analysts at Nomura noted that Randal Quarles, nominated to be the Vice President of Supervision at the Board of Governors of the Federal Reserve System, testified at the Senate Banking Committee today.

Key Quotes:

"Although there was no major surprise during his testimony while answering questions, he stated that he does not advocate adopting a Taylor rule approach to guide policy. 

Previously, he has advocated for adopting a stricter rule for policy. 

The departure from his previous remarks appears to place him more in line with the FOMC’s preference for examining a wide range of labor market data as well as prescriptions for the current setting of the federal funds rate from a number of monetary policy rules, instead of a more mechanical approach. 

The semiannual Monetary Policy Report, issued in July, reiterated the FOMC’s view on the use of policy rules."