Jeff Currie, the CEO and founder of Real Macro who built his Wall Street reputation at Goldman Sachs Group Inc., told Bloomberg Television's Surveillance on Friday that $5 gas is a key psychological line as voters head into the Nov. 3 contests to decide control of Congress. He called the chance of hitting that level by Election Day "extremely high."
His diagnosis: a harsh mix of scarcity and currency debasement. He said shortages that first hit refined fuels are now creeping back into crude itself. He also noted that releases from the Strategic Petroleum Reserve, which helped plug earlier gaps, show no signs of being extended. "Crude is the signal, and now we think about products - they are the noise," he said.
Although pump prices haven't breached $5 since the post-pandemic inflation surge in 2022, the latest escalation in the US-Iran war lifted the nationwide average above $4.29 per gallon as of Thursday. Diesel crossed the $6-per-gallon threshold for the first time, and Currie said U.S. diesel could climb to somewhere between $7 and $9.
He pointed to Thursday's spike in crude, when Brent at one stage was up more than 8 percent, as evidence that traders are bracing for bigger and longer lasting disruptions. It was not just near term contracts moving, he said, but the whole futures curve. "You're entering a really dangerous phase of this commodity rally because the shortages are so extreme on both sides that the whole complex moves," he said.
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Currie warned that refineries toggling between diesel and gasoline will eventually hit the limits of what their plants can do. He added that crude and products rallying together looks more like a structural crunch than a garden variety squeeze. That is why he said he had not been willing to suggest a long crude, short products trade, since both legs have been rising.
Stress is showing up in the farm belt too, he said. With soybeans at $13.30 a bushel - "beans in the teens" - and wheat and corn still elevated, he called it an active "food crisis." Metals are flashing scarcity signals as well, with copper repeatedly setting fresh records in recent weeks. He said "the illusion of abundance" keeps other commodity markets and policymakers from recognizing how tight supplies already are.
Currie's view is clear: "I'm just banging the table if there's ever a time to own commodities," adding, "In fact, you can't get a better story. If it doesn't work with scarcity and debasement together, it'll never work." Translation for everyday budgets: if fuel and food stay hot, the squeeze shows up at the gas station and the grocery store long before it shows up in an index.
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