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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Police shoot man in parliament

A man carrying what appeared to be a knife was shot by armed police after entering the parliamentary estate. 

From the window of the parliamentary Press Gallery, I have just seen police shoot a man who charged at officers while carrying what appeared to be a knife. A large crowd was seen fleeing from the man before he entered the parliamentary estate.

After several officers evaded him he was swiftly shot by armed police.

Ministers have been evacuated and journalists ordered to remain at their desks. 

More follows. Read Julia Rampen's news story here.

Armed police at the cordon outside Parliament on Wednesday afternoon. Photo: Getty

George Eaton is political editor of the New Statesman.