Excess Returns · Saturday, August 8, 2026
Richard Bernstein argues that the Federal Reserve has deviated from the principles of the Taylor rule, a benchmark for monetary policy. He points out that various versions of the Taylor rule consistently suggest the Fed should be hiking rates, yet policy has often been the opposite.
“Look, I think, uh, well, I think the, the, uh, the Taylor rule, and there's, as Rich said, there's dozens of different versions. They all suggest that the Fed should be hiking rates. And therefore, whether it was Bernanke or Yellen or whoever was the, uh, chair, that they were, they were, uh, lowering rates and they shouldn't be.”
“And so, all I really done in my commentary over the past year or so is kind of poke people about that and say, hey, you know, how come the Taylor rule was, was the Rosetta Stone, if you will, of conservative monetary policy and now nobody talks about it?”
“The Atlanta Fed has 30 different versions. All 30 suggest that the Fed should be hiking rates.”