'Growth', guv's tie colour likely to signal rate moves: SBI's report

SBI explores correlations between policy language and RBI Governor's tie colours, suggesting subtle textual and visual cues may foreshadow monetary policy changes

Certain words in the Governor’s speech may reflect a realignment in the policy priorities of the Reserve Bank of India (RBI), according to a report by the State Bank of India (SBI).

 

The word “growth” was mentioned 24 times in the June 2025 policy statement, according to the report called ‘The Monetary Multiverse’. SBI said the report’s analysis should be taken “on a lighter note”.

 

The change in language was followed by a 50 basis point policy rate cut.

 

According to the report, patterns in word frequency can serve as early indicators of changing monetary policy stance. When words like “growth” become more prominent than “inflation,” it typically suggests a tilt towards accommodative policy. The frequency is visualised using word clouds. 

 

The report also analysed whether the colour of the RBI Governor’s necktie could signal policy direction. ‘Necktie Nomics’ categorises tie colours into four tone groups based on psychological and visual perception theory. The four tones are warm (red, orange, coral), cool (blue, light blue, aqua), dark (black, navy, black with silver), and mixed (purple, yellow).

 

The report assigned numerical values to policy actions — 1 for rate hikes, 0 for hold, and –1 for rate cuts — and correlated them with tie tones. It then introduces the Tie Volatility and Tilt Index (TVTI), which is derived by multiplying the Policy Tilt Score (average action score per colour category) with (1 – Policy Volatility Score) to assess consistency.

 

According to the report, warm-toned ties showed a slightly hawkish bias and were more often associated with rate hikes. Cool-toned ties were found to be neutral, aligning with unchanged rate decisions. Dark-toned ties did not indicate policy direction but were associated with decisiveness, the likelihood of a decision — cut or hike — being made. Mixed tones were associated with the highest volatility and least predictability. The report noted that during the most recent 50 basis point rate cut, Governor Sanjay Malhotra wore a dark tie, consistent with the tone’s association with clear policy actions.

 

SBI said that the analysis does not intend to replace traditional economic models. It suggests that in a world increasingly driven by communication and perception, textual and visual cues from the central bank may offer additional context alongside formal data.

 

The report added that while these indicators are not part of conventional monetary policy frameworks, they reflect recurring patterns worth observing, especially when supported by quantitative analysis.