Both forms are now known as Taylor rules. -5Shifting Stars during Normalization In December 2013, the FOMC began winding down the final crisis-era asset purchase program. Asset purchases declined to zero over 2014, and in December 2015, the FOMC began the gradual normalization of interest rates that continues to this day.
As normalization has proceeded, FOMC participants and many other private- and publicsector analysts regularly adjusted their assessments of the stars (figure 1). Many projections of the natural rate of unemployment fell roughly 1 full percentage point, as did assessments of the neutral interest rate. Estimates of the potential growth rate of GDP slipped about 1/2 percentage point. These changing assessments have big implications.