Inflation of 3.5% in June indicates slow progress in hitting the 2% Fed target. We’d like to see Fed Chair Kevin Warsh aim for a close-to-zero CPI rate to drain excessive price increases from the economy from the Biden years. As the chart below shows, most of the run-up in prices that we pay today happened under Old Joe.

High gas prices are still a major consumer frustration. But again, compared to what? Below we see that month by month gas prices have been consistently lower than the big spikes under Biden.

The current inflation rate is obviously elevated by the rise in energy prices from $60 to $77 per barrel today. Our concern is that the latest flare-up in the Middle East could keep energy and food prices elevated in the coming weeks.