Last Friday we got the latest numbers on the Fed's preferred measure of inflation. It's running slightly above 2 percent, the target rate, but we know that this small overshoot largely reflects measured housing costs, which are a lagging indicator.
Put these five reports together, and they tell us two things. First, we've won the war on inflation - and we did it without a recession or a large rise in unemployment.
The recession prophets were completely wrong. The Biden boom - and yes, it was a boom, with remarkable growth in both G.D.P. and employment – is losing steam.
The Fed has been trying to steer between two risks: the risk of cutting too fast and reigniting inflation and the risk of cutting too slowly and allowing the economy to slide into recession.
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