Good news and bad news on the state of the economy.

The good news is that there are four forward-looking signs of continued reduction of inflation from the current 8% and we see the rate falling to about 5% in the months ahead.

• • • Commodity Index of more than 20 commodities – the index hit a high of 350 in July and now it is at 305. We think the Fed should push the CRB index down to roughly 300 and its monetary policy should be to keep it there.

The Gold price has fallen from a high of above $2,000 an ounce in March to $1,720.

The inflation-adjusted 10-year TIPS spread has inflation at 2.45% down from 3% in March. The five-year has also fallen from its Spring peak.

The dollar is rising in value relative to the Euro, the Yen, the pound, and almost all other currencies. This will likely reduce import costs modestly in the months ahead.

The bad news is inflation is coming down because the world economy is stalling out due to a lack of any growth initiatives almost anywhere on the planet. The war on fossil fuels is wreaking havoc.

What is especially sad is that the U.S. now leads the world in economic idiocy. Under Biden, the U.S. has moved to the left of even Europe on climate change craziness and government as “stimulus.”