A jobless rate in Australia that surpasses the U.S. level may not seem like a problem for Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi. But it may be a sign of the overconfidence that affects central bankers everywhere.
Folks in “The Lucky Country” have long been blessed with top-notch monetary policy makers. There has been no recession on the watch of Reserve Bank of Australia Governor Glenn Stevens or under his predecessor, Ian Macfarlane, who served from 1996 to 2006. Stevens, though, is perilously close to making the kind of policy mistake that’s been so rare at the RBA. On Aug. 5, he opted against cutting interest rates for a 12th consecutive month. Two days later, the jobless rate rose to 6.4 percent, the highest since 2002, compared with 6.2 percent in the U.S. Read More