If we replace that intercept with the median of the longer-run r* implied by the most recent SEP, which is 0.9 percent, we see that the rule prescribes much lower settings for policy interest rates than the unadjusted rule (the blue dashed line in figure 7). The lower intercept does not completely close the gap between the Taylor rule prescription and the dots.
However, many observers believe that the neutral real interest rate is currently well below its longer-run value. The language that has appeared in the Committee’s postmeeting statement since December 2015 that “the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run” is consistent with this view.