Consumer prices rose by 3.4% in August. Gas is closing in at $4 a gallon.

What’s remarkable about the just-released report is that prices for almost every other good and service beside energy has recorded tame price rises. Energy is up 16% but almost everything else is at or below 3% year over year inflation. Surprisingly, even food prices that are dependent on energy costs rose by less than 3%.

IF energy costs stabilize – and lord knows when that happens – we think we could see inflation fall to close to zero and even slight disinflation due to productivity improvements from AI and tech improvements.