It's naive to think that the Fed just uses some simple Taylor rule or Philips curve model in their policy decisions. Along with having a full staff of economist

It's naive to think that the Fed just uses some simple Taylor rule or Philips curve model in their policy decisions. Along with having a full staff of economists and research assistants doing econometrics, they have sophisticated microfoundational computational models like the NY Fed's DSGE model[1] (that they recently open-sourced in Julia[2]). There's a lot more to macroeconomic prediction than just "adding another variable." [1] http://libertystreeteconomics.newyorkfed.org/2014/09/forecasting-with-the-frbny-dsge-model.html http://libertystreeteconomics.newyorkfed.org/2014/09/forecas... [2] https://github.com/FRBNY-DSGE/DSGE.jl https://github.com/FRBNY-DSGE/DSGE.jl