Structural Breaks in the Taylor Rule

Stillwagon (this issue) tests extensively for structural breaks in a dynamic Taylor rule for US data and finds no breaks over 2001–2025, whether using Bai–Perron tests or multiplicative indicator saturation. The current paper complements and builds on Stillwagon by focusing on features specific to three Fed chairs (Bernanke, Yellen, and Powell) during 2006–2025, and on the zero lower bound. The Taylor rule is chair‐specific; and the zero lower bound affects the Taylor rule for Yellen's and Powell's tenures. These economically significant structural breaks are detectable by multiplicative indicator saturation that focuses on those features, whereas the broad‐spectrum multiplicative indicator saturation in Stillwagon misses these breaks. Such structural breaks limit the interpretability and usefulness of the Taylor rule for monetary policy.