R Street Institute

Op-Eds

Cloudy crystal ball

Feb 16, 2016
Print
originally published in Barron’s
The Federal Reserve, that alleged master of financial “systemic risk,” completely failed to forecast the biggest credit event of current times: the collapse in oil prices. Of course, the Fed was not alone in missing the coming vertiginous drop in the price of oil—a price on which plenty of now-painful leverage had been built.

Andrew Bary’s forecasting challenge of a year ago (“Winner of Barron’s Forecast Quiz,”Jan. 30) included a question on where the price of oil would be at the end of 2015. The choices were: under $50; $50 to $65; $66 to $90; or above $90. Note there was no choice for “under $40,” the more correct answer. Barron’s could instructively publish how the 1,700 entrants in the challenge voted on this question.

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