Is the Taylor rule still working?

Yes, but there has been a regime change.
Reset the baseline to the last quarter of 2008, we have had an equilibrium shift.

The Fed Money letter talks about the Taylor Rule, (HT Geg Mankiw) and why it predicts a -5% interest rate. What nonsense, the Taylor Rule is a Newtonian construct, only valid for keeping the economy stable about the an equilibrium point that has been stable for some time. We have had a shift in the eigenvectors, we have incorporated the new technology, we have restructured. One has to start from the point of restructuring and reset the initial point from there.

Remember stationarity in stochastic approximation? The proper interest rate for overnight funds should be raised, as John Taylor suggests, start fresh.