Last Friday I noticed in a story on interest.co.nz this chart taken from a recent BNZ commentary.

I stuck it on Twitter and then to illustrate more starkly something about the contrast with the pandemic period followed up with this

In 2020 there was (inevitably) extreme uncertainty about the outlook for Covid, for any possible vaccine, for border restrictions, and (you might have thought) for what it all meant for inflation. By mid 2021 the conditions that gave rise to the worst outburst of core inflation in many decades were all in train, and yet the MPC seemed not to feel (or, at least, state) any particular uncertainty at all.

Quite what, if anything, it meant wasn’t really clear. Perhaps they really were pretty complacent back in 2020 and 2021 (as the time series chart shows despite the apparent magnitude of the shock, and the lack of precedents, “uncertain” was not being used a lot more than usual). Or perhaps this year’s heavy use of the term is some sort of reaction to past mistakes, or Trump just makes an easy target? Perhaps, having suddenly lost a Governor (who’d overseen all the other MPSs used in this chart), things went a little wild in the latest statement with the new and inexperienced guy in charge?

So I wondered what a similar chart looked like for other central banks. I had a look at the Reserve Bank of Australia, the Bank of England, and the Bank of Canada, all of whom publish similar documents on a quarterly cycle (Canada in Jan, Apr, July, the others in Feb, May and August).

Three things caught my eye:

• First, how similar the RBA and RBNZ usage frequency has been through these episodes. Not identical but quite close
• Second, how much more commonly the Bank of England was referring to uncertainty through the pandemic period. The most recent statement still has a lot more references than back then, but the contrast is much less stark. For the pandemic period I’d say that is to their credit.
• Third, the Bank of Canada had the fewest uses of “uncertain” in all five periods, including – and most strikingly, given Canada’s vulnerability to US tariffs etc – in the most recent set of reports (the Canadian one came out on 16 April, the period of peak “Liberation Day” tariff concern globally).

I also had a look at the final Monetary Policy Statement/Report for 2019 for each central bank (wholly pre-Covid). As it happened, the Bank of England had used “uncertain” 214 times in their November 2019 document, mostly as regards Brexit.

I don’t want to draw any strong conclusions from any of this. And I don’t even particularly disagree with the MPC’s on-balance assessment of where the US tariff risks lie (mainly in a disinflationary direction for New Zealand), but you do have to wonder about just how they went so far over the top in last week’s document with the number of references to “uncertainty”. The Trump stuff matters – both the uncertainty about the policies themselves (and retaliation) and uncertainty about the economic impact – but it isn’t clear that the degree of uncertainty we (or the MPC) face is anything like that during the early months of the pandemic or (though they did not recognise it at the time) the big policy mistakes leading to outburst of core inflation that we are still living with the aftermath of.

And how does uncertainty compare now to that at the height of the financial crisis in 2008/09? I’d have thought that, particularly for monetary policy purposes, the financial crisis offered at least as much uncertainty for the global macro outlook (as it affected New Zealand) than the current tariff chaos. But judging by MPS uses of uncertainty, the Reserve Bank appears not to have thought so.

All a bit puzzling really. I wouldn’t make too much of it, but the data are perhaps something for the MPC to reflect on.

(Incidentally, in case anyone is wondering about the Fed, they don’t do a six-monthly statement. On the couple of occasions when the dates aligned, including February 2025, they used “uncertain” less often than the central banks I looked at here.)