It is a rule referred to while setting the US Fed's policy rate. It was developed by John Taylor, an economist at the Stanford University, in 1993 and it links the benchmark rates to inflation and economic growth. It recommends that the interest rates be raised if inflation or economic growth is above the Fed's target and lowered if it goes the other way. It is in news because St Louis' Fed chief presented a chart that recommended a Fed rate in the range of 5-7%, based on a Taylor-type rule, which is much higher than the current range of 3.75-4% and this set off a panic in the market.