It takes some discipline to write an economic blog about something unimportant. Today’s inflation report showed that inflation has decreased for eleven straight months – ELEVEN STRAIGHT MONTHS. Expecting year-over-year inflation of 4.1%, it is only 4.0%. That’s a long way from 9.1% last year.

The Fed’s goal is a mere 2.0% rate of inflation. Of course, wringing the last percentage point out of inflation is usually much more difficult than wringing out the first percentage point. In other words, going from 9% to 8% was easy compared to going from 3% to only 2%, and that’s okay! Going from 9% today to 2% tomorrow would be an economic disaster. Wringing out inflation should be done slowly, as we are doing right now.

Tomorrow, the Fed will safely slow down its interest rate increases, to see how much the economy has already slowed. If they do, I expect we’ll still see the TWELFTH STRAIGHT MONTH of falling inflation next month.

So, if this doesn’t seem important to me, why am I taking the time to write about it? Because American over-react badly to this particular economic problem – you know – once burnt, twice shy. Yes, we got burnt by inflation in early 1980’s, but that doesn’t mean we learned nothing. As I’ve been saying for the past year, “Relax, this is not your father’s inflation!” It is already passing . . .