The current year-over-year inflation rate is running at roughly 3.5%.

That’s higher than we, the Fed, and consumers want it to be.

Our four most reliable lead indicators on prices have inflation running in the closer 3% to 4% range over the months to come. The wild card continues to be whether we can get the oil flowing again through the Straits of Hormuz.

Here are the best measures of future prices to pay attention to:

• TIPS spread – this is the market’s best guess on where inflation is headed over the next five years. The current TIPS spread is running at close to 2.35%. The goal is to get inflation below the Fed target of 2% and hold it steady. But the good news is that global investors do NOT see a sharp rise of inflation in the months or years ahead.

• Gold Price. This has been a wild ride. In January the gold price hit an all time high of $5,300 and then proceeded to drop to a low of just above $4,000 early this summer and now stands at $4,600.  But still, the price of gold is down for the year, which is anti-inflationary.

• Commodity Prices. This makes us very nervous. The CRB price index of major commodities indicates a 35% rise over the price this time last year.  That’s bad news.

• 10 Year Treasury Bill Yield. Currently running at 4.7%, this is a 50 basis point rise from a year ago. The rate fell below 4% before the Iran conflict began. The cost of borrowing is rising, but mainly as a modest hedge against inflation.

Bottom line assessment: inflation remains sticky but is likely to fall gradually over the next year to the 2.4 to 3.0% range for the next year or so. That’s still too high, but the good news is that the risk of a hyper-inflation bulge is very low.