policy. it would also lead the fomc to discuss policy in the context of rules and a systematic approach to decision - making, which i believe will lead to better decisions and better economic outcomes over the longer run. moreover, it would require policymakers to explain why they choose to deviate from the benchmarks and the guidelines they provide. an example as i discussed, communication is an important aspect of monetary policy. i have long been an advocate of the fed producing a periodic monetary policy report similar to other central banks. it is simply too difficult to convey monetary policy design and strategy within the confines of the brief statements issued at the conclusion of each fomc meeting. therefore, what i am about to suggest should not be viewed in isolation but as one part of such a periodic report to the public. so, let me illustrate how we might begin to incorporate a more systematic and transparent approach to rule - like decision - making. i view this as one step in a journey, not as the end result. my example uses five simple rules that have been discussed in the literature and describes their implications for the projected path of the funds rate from now through 2015. since these rules are contingent on economic conditions, i will use the midpoint of the forecasts derived from the most recent sep and apply an okun ’ s law relationship to convert projections of unemployment into projections of economic slack. i should immediately note that this is not a completely coherent exercise as each participant ’ s projections were based on his or her own view of optimal policy and, as you are well aware, those views differ. put differently, the midpoint of the projections arises from an amalgam of different models and thus represents no one ’ s forecast or model. thus, the results are likely to be more diverse than otherwise expected. so my example is purely illustrative yet easily replicable. however, given the relevance of the sep, i thought the exercise would be more interesting than if i used an offthe - shelf economic model. the rules i have chosen are these : first, the original taylor 1993 rule ; second, a variant of taylor ’ s original rule, sometimes called the taylor 1999 rule, which places greater emphasis on the output gap ; third, a version of the taylor 1999 rule that allows for considerable interest - rate smoothing and is called the inertial taylor 1999 rule ; fourth, a performance - or outcome - based rule developed by staff at the philadelphia fed that is simply an estimated rule that best

framework by producing a detailed monetary policy report, similar to those issued by many central banks around the world. one aspect of such a report could highlight the policy paths implied by a few taylor - like or robust rules and use them as benchmarks to set and communicate policy in a more systematic, rule - like way. i will begin with a brief overview of my thoughts about the economy and the fomc ’ s most recent policy decisions before i discuss the role that systematic policy can play in the communication of policy. the economy and the recent policy decision first, the economy. my overall view of the economy is fairly optimistic. after a first quarter buffeted by winter storms, i believe we are poised to grow at a rate somewhat above trend bis central bankers ’ speeches for the remainder of this year and next before reverting back to trend, which i see as about 2. 4 percent. steady employment growth and healthier household balance sheets will support consumption activity. the current data suggest economic strength is fairly broad based, as evidenced by recent indicators and the optimism expressed by firms in both the manufacturing and service sectors. as for inflation, recent readings have moved a bit higher, mitigating somewhat the concerns that low inflation will persist or decline further. we have ample monetary accommodation in the economy to ensure that we will be able to achieve our 2 percent target over time. it is important, however, that we continue to reinforce our commitment to that goal so that inflation expectations remain well anchored near our target. at the meeting last week, the fomc released its latest summary of economic projections ( sep ). the outlook going forward was largely unchanged. while real gdp growth for 2014 was marked down, which reflected the disappointing first quarter, the outlook for the second half of the year and the projections for 2015 and 2016 were unchanged. unemployment projections were reduced slightly, and the inflation forecast remained stable. my own submission for economic growth was generally in line with my colleagues. but my forecast for unemployment was a bit lower in the near term. specifically, i think the unemployment rate may reach 5. 8 percent by the end of this year and 5. 6 percent by the end of 2015. my view of inflation is that it will stabilize at about 2 percent in 2015. some market participants and commentators have focused on the so - called dot charts and the movement of the implied median funds rate for 2014 – 16. i would remind everyone that the dots are not a forecast of what policymakers think the committee will