Dear Hedgeye Nation,

We just hosted nine of the sharpest investing minds on HedgeyeTV for a 3-day bonanza of world-class interviews. During our semiannual Hedgeye Investing Summit, Hedgeye CEO Keith McCullough was joined by Grant Williams, (Co-Founder Real Vision & Founder of Things That Make You Go Hmmm...) 

Below is a brief excerpt and transcript from the interview. You can access the entire hour-long interview, as well as the 8 other financial market webcasts, by registering here.

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In this clip from the second day of Hedgeye’s Investing Summit, Hedgeye CEO Keith McCullough engages in a lively discussion with Grant Williams, (Co-Founder Real Vision & Founder of Things That Make You Go Hmmm...) about the current effects of “transitory” inflation for the average citizen and what they call the "blatant lack of transparency" from Fed officials.

“We are in the post-consequence world unfortunately. That’s what we inhabit now. The brazenness of all these guys is rooted in years of there being no consequences for any kind of malfeasance,” explains Williams. “It’s a really bad look at the very best.”

“If the Fed was ever at the wrong spot in terms of public distrust where I got them, it’s now,” exclaims McCullough.


McCullough: The only thing I'm certain of is that the Federal Reserve is going to look like they're lied to people. And that's a that's a that's a that's a major problem in addition to the issues that they already have in terms of insider trading or frontrunning or not.

What do you think? Do you think that they are at the point? Like a lot of us, I'm a Fed critic. I but I think for the right reasons at this point, you can't analyze anything. And you're you're frontrunning with your own PA's.

I mean, if the Fed was ever at the wrong spot in terms of public distrust, where I got them, it's now.

Williams: Yeah. Yeah. No, I think I think you're right. And it's interesting because, you know, you talk about well, you talked about their Wall Street isn't the real world.

There are two problems. One, we tend to look at everything as a as a data point and as a chart. We extrapolate them and we look at we look at the pictures and we try and figure out where things are going.

But they're numbers on charts. Yeah, one of the one of the things about Wall Street is that its provided people with a standard of living. That means that the kind of marginal inflation is something that they notice, certainly.

But it's not going to change their behaviors necessarily. You know, the higher echelons of Wall Street, you know that that super yacht goes up 10%. Maybe you end up not buying another one. But but in terms of grossly you're going to go you're going to feel the pinch. You go, wow, this was really expensive this year. It's not going to change behaviors.

However, that changes very quickly. You know, as you move down the socioeconomic curve, it becomes a huge problem when we talk about food here.

Right. We talk about food and shelter, the basics and power. And so, you know, the Fed find themselves a place where, do we do we want to be looked upon as lying to the public or do we want to be looked upon as incompetent? And we got it wrong. Blatantly wrong. I mean, it's tough choice.

Well, it's a tough choice.

McCullough: I mean, but this flipped in the night. And again, I'm not saying it's the 1970s. I'm saying if there's a flip coming because there's there is no data to support the prior premise.

Zero. You know, so and it's not just the Fed. I mean, it's just looking up this guy's name, this guy, Brian Deese, who made plenty of re tweet waves on my handle when he said he's the head of the National Economic Council at this point, younger guy.

He's like, well, if you back all that stuff out that you just said, Grant, including, you know, including food, there's no inflation. What are talking about? 

I mean, this guy looks like he's unequivocally partizan, obviously, but unaware, maybe, and willing to say anything. But in the 1970s, it changed like, you know, the same guy at the same job in the Nixon administration was a Republican instead of a Democrat. And I don't know if it matters what what the differences would call inflation, a hydra headed monster that will not go away.

So that's what I'm wondering like, is that actually going to be what these guys have to flip to say within six months?

I doubt it, but that would be interesting.

Williams: Well, think about it. What it comes down to are votes ultimately, right? That's what all this comes down to. And and if inflation is the thing that is potentially causing the most people to flip their vote, then it will have to be tackled and it will be called a hydra headed monster. And it will be something we have to get under control. Because you're pining for people that you're hurting the most. And that's one of the big dangers here, not not coming from the Fed, but coming from administration.