A resurgence in interest and research about systematic approaches to monetary policy was sparked by the observation of John Taylor, currently Undersecretary of the Department of the Treasury, that the FOMC's conduct of monetary policy since the late 1980s has been well explained by a simple formula, often called the Taylor rule, that relates the level of the federal funds rate to the observed levels of the inflation and the unemployment rates.
Over the past years, the underlying strength of monetary and credit expansion in the euro area has created upside risks to price stability that appear to have become manifest as inflation has trended upwards. This confirms ex post the prominent role our strategy assigns to money.