Australia's central bank governor makes joke, screws everything up

Monetary policy: not very funny

Central bankers shouldn't make jokes, that much is clear. The Governor of the Reserve Bank of Australia, Glenn Stevens, made one yesterday, and it didn't go down well. Here's the joke:

As some of you may know, the Reserve Bank Board meeting was in Brisbane yesterday at which we deliberated for a long time to leave the cash rate unchanged.

A rib-tickler, I'm sure you'll agree. The joke here (and having to explain a joke is never a good sign) is that they didn't do anything – the cash rate stayed at 2.75 per cent – so the thought of deliberating for a long time over it is funny.

Except the problem is 1. that's not really funny at all and 2. what everyone thought he meant is that they seriously considered changing the cash rate, meaning it was more likely to change next time. And given they thought that, they acted on it, selling the australian dollar hard and selling it fast. Via FT Alphaville:

Oh no! The joke was confirmed as such shortly after, but not before a lot of people had lost a lot of money. The contrite deputy governor, Philip Lowe, said today that he'd spoken to his boss:

They were meant to be a light-hearted remark after what, he reports to me, was a very light-hearted introduction. I think some people in the financial markets and perhaps the press misinterpreted the intention of those remarks.

If we're looking for teachable moments here (and we're always looking for teachable moments), there are two to take home. Firstly, in a world where forward guidance is increasingly a standard tool in the central banker's kit, the words they use to communicate are more and more important. They can bring down economies, and should be treated with care.

Secondly, if you are the governor of a central bank, don't try and make off-the-cuff jokes during press conferences. It's likely to go wrong.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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If Seumas Milne leaves Jeremy Corbyn, he'll do it on his own terms

The Corbynista comms chief has been keeping a diary. 

It’s been a departure long rumoured: Seumas Milne to leave post as Jeremy Corbyn’s director of communications and strategy to return to the Guardian.

With his loan deal set to expire on 20 October, speculation is mounting that he will quit the leader’s office. 

Although Milne is a key part of the set-up – at times of crisis, Corbyn likes to surround himself with long-time associates, of whom Milne is one – he has enemies within the inner circle as well. As I wrote at the start of the coup, there is a feeling among Corbyn’s allies in the trade unions and Momentum that the leader’s offfice “fucked the first year and had to be rescued”, with Milne taking much of the blame. 

Senior figures in Momentum are keen for him to be replaced, while the TSSA, whose general secretary, Manuel Cortes, is one of Corbyn’s most reliable allies, is said to be keen for their man Sam Tarry to take post in the leader’s office on a semi-permanent basis. (Tarry won the respect of many generally hostile journalists when he served as campaign chief on the Corbyn re-election bid.) There have already been personnel changes at the behest of Corbyn-allied trade unions, with a designated speechwriter being brought in.

But Milne has seen off the attempt to remove him, with one source saying his critics had been “outplayed, again” and that any new hires will be designed to bolster, rather than replace Milne as comms chief. 

Milne, however, has found the last year a trial. I am reliably informed that he has been keeping a diary and is keen for the full story of the year to come out. With his place secure, he could leave “with his head held high”, rather than being forced out by his enemies and made a scapegoat for failures elsewhere, as friends fear he has been. The contents of the diary would also allow him to return in triumph to The Guardian rather than slinking back. 

So whether he decides to remain in the Corbyn camp or walk away, the Milne effect on Team Corbyn is set to endure.

 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.