Taylor’s formula says the Fed’s main target interest rate should be 1.5 times the inflation rate, plus 0.5 times the gap between the economy’s potential growth rate and the current pace, plus 1. Taylor, 62, who served under President George W. Bush as a Treasury undersecretary, published the rule in a paper for a 1992 conference when at Stanford. One main inflation indicator Fed officials use to monitor price pressures, the personal consumption price index, rose 0.8 percent in the first quarter from a year earlier. In the same period, the so-called output gap, as measured by the Congressional Budget Office, showed a shortfall of 6.31 percentage points. Alternative Strategy Those figures suggest the federal funds rate target should actually be negative 0.955 percent. Since the Fed can’t lower rates to less than zero, the Taylor rule means the central bank has to pump money into the economy through other methods, such as purchases of Treasuries, mortgage securities and agency bonds.