OPINION: Philip Lowe’s big mistake was Reserve Bank governor was to speak in terms that ordinary Australians could understand, rather than resorting to central banker-speak.
If Philip Lowe has any regret over his seven-year term as governor, it will be that he failed to follow the time-honoured practice of using incomprehensible central-banker babble when he communicated with the public.
Philip Lowe had to admit his prediction that interest rates would stay low until 2024 was an “embarrassing” error.Greenspan – and most other central bankers who follow his wise dictum – would never have committed Lowe’s mistake of clearly stating that the Reserve Bank believed interest rates would not rise until at least 2024., was an “embarrassing” error, and the Reserve Bank “should have done better”.
The Fed’s forecasts were contained in dot points, which are scrutinised only by professional economists and bond traders, and completely unintelligible to the public.
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