Greg Ip

And economists like to take out the energy and food portions, not because they don't actually think those are important, but because they're very volatile.

And economists like to take out the energy and food portions, not because they don't actually think those are important, but because they're very volatile.

Right.

Right.

And if you do that, you come up with an inflation rate of only around 2.5%, which is the lowest for that number since 2021, just after the pandemic.

And if you do that, you come up with an inflation rate of only around 2.5%, which is the lowest for that number since 2021, just after the pandemic.

But as you said, the devil is in the details.

But as you said, the devil is in the details.

If you look below the surface, you do still see some signs of tariff inflation in things like appliances and other imported goods.

If you look below the surface, you do still see some signs of tariff inflation in things like appliances and other imported goods.

And also, this may come as a surprise to some people, but there's actually several different ways to measure inflation.

And also, this may come as a surprise to some people, but there's actually several different ways to measure inflation.

And the Federal Reserve has its own preferred inflation gauge.

And the Federal Reserve has its own preferred inflation gauge.

And when you actually see how today's report affects that alternative gauge, it suggests inflation might actually be still stuck at around 3%, which is too high for the Fed, which prefers an inflation rate of 2%.

And when you actually see how today's report affects that alternative gauge, it suggests inflation might actually be still stuck at around 3%, which is too high for the Fed, which prefers an inflation rate of 2%.

I think we're actually right around the peak.

I think we're actually right around the peak.

And that, as you suggested, as Powell predicts, we're going to see less and less of that effect as the year unfolds.

And that, as you suggested, as Powell predicts, we're going to see less and less of that effect as the year unfolds.