The article using the logarithmic smooth transition regression model (LSTR) contains the currency factor, multiple nonlinear Taylor rule of asset price factors and the applicability of the inspection in China, the empirical results indicate that: (1) the interest rate rules about its lag one period for transition variable nonlinear function;(2) in the process of China's monetary policy interest rate smoothing degree is higher, 0.83;(3) during the period of samples, nonlinear transformation function has a more significant four stages;(4) both linear and nonlinear Taylor rule, reaction on inflation rates are insufficient, therefore has intrinsic instability;(5) in the previous Taylor rule, in the empirical literature to explain the multicollinearity between variable little attention.Concluded that if the volatile variables, the multicollinearity problem should be the necessary attention.