This paper estimates the forwardlooking, backwardlooking and hybrid Taylor Rule’s reaction function, and then respectively tests the three different Taylor Rule from two aspects of market interest rate and regulated interest rate. The result shows that the forwardlooking Taylor Rule reaction function can describe the specific path of interest rates in China better. Market interest rate can represent the characteristic of countercyclical regulation in monetary policy better. So, the central bank should further strengthenforwardlooking in regulation when setting the monetary policy. Meanwhile, the government should promote the market reform on interest rate steadily, which is conducive to economic restructuring and promoting transformation and upgrading of China’s economy.