Editor's note: This is an excerpt from today's Morning Newsletter written by Hedgeye CEO Keith McCullough. Click here to become a subscriber.
But, have no fear, the San Francisco Fed’s John Williams is here! Being a lifer at the Federal Reserve is not a compliment. John has been there since 1994 and, alongside Janet, missed some large predictions about risk (2000, 2008, to name a few) along the way.
Not to be confused with one of the best American composer’s in US history (The John Williams of Jaws, ET, Star Wars, etc. film score fame), this Williams is more like Brian – a storyteller, but with less NBC Nightly pizzazz.
In assessing the US economy yesterday, Williams said two things in particular that caught my attention:
- Employment – he called the jobs market “remarkable” (as in booming, strong, etc.)
- Oil – he called the recent #Deflation “transitory” (as in oil is going higher, not lower)
Yes, in case you didn’t know – now you know. Some of the worst forecasters in our profession now have forecasts for everything.
Notwithstanding simple things like long-term mean reversions, price history (Oil averaged sub $20/barrel during both the 1983-1989 and 1993-1999 real US economic demand booms), etc., this storytelling from Fed heads is becoming a massive risk to the economy.