Federal funds rate = 8.5 + 1.4 (Core inflation – Unemployment).
Here "core inflation" is the CPI inflation rate over the previous 12 months excluding food and energy, and "unemployment" is the seasonally-adjusted unemployment rate. The parameters in this formula were chosen to offer the best fit for data from the 1990s. You can think of this equation as a version of a Taylor rule.
Eddy Elfenbein has recently replotted this equation. Here it is:
This is functionally equivalent to my argument about the natural rate. Essentially, Greg’s rule attempts to match the Funds rate to the natural rate (with a little bit of kick on each side for stability).