In a humorous twist to monetary policy analysis, SBI Research has released a light-hearted report titled The Monetary Multiverse, suggesting that the colour of the Reserve Bank of India (RBI) Governor’s necktie might hint at upcoming policy decisions.
“Imagine a world where interest rates aren’t determined by models, mandates or macroeconomic indicators—but by midnight tweets, personal equations and possibly necktie colours,” opens the report, adding that all insights should be taken “on a lighter note.”
Necktie Nomics: When Fashion Meets Fiscal Signals
Drawing from psychological theory and past policy events, the report analyzes the Governor’s tie colours and classifies them into four categories:
- Warm Tones (reds, peach, orange): Slightly hawkish, often appearing during rate hikes.
- Cool Tones (blues, aqua): Associated with neutral policy, typically seen before status quo decisions.
- Dark Tones (black, navy): Linked with decisiveness, frequently worn during major announcements like the recent 50-basis-point cut.
- Mixed Tones (purple, yellow): Unpredictable, with inconsistent outcomes across events.
TVTI: The Tie Volatility and Tilt Index
SBI also introduced a fictional metric, the Tie Volatility and Tilt Index (TVTI), to measure how consistently a colour aligns with specific policy directions. According to the analysis:
- Red and Coral ties scored high on hawkishness.
- Light Blues strongly indicated policy neutrality.
- Dark Colours, especially black and navy, reflected firm decision-making — as seen when Governor Sanjay Malhotra wore a dark tie during the surprise 50 bps rate cut last month.
Though tongue-in-cheek, the report ends on a thoughtful note: “In an uncertainty-besieged world, dark looks more associated with decisiveness,” offering a fashionable lens through which to interpret the otherwise stoic world of central banking.
In the end, while spreadsheets still rule the world of macroeconomics, it seems a splash of colour might not go unnoticed.