Let’s start with a few words about today’s hotter than expected Consumer Price Index. It wasn’t a disaster, but it wasn’t so great either.  

Basically, the Federal Reserve at this point is a one-man band getting no help from President Biden’s inflationary fiscal policy. Yet the central bank is making progress. Today’s topline number was 6.4 percent; excluding food and energy, the core rate was 5.6 percent. 

One reason I hate this core rate stuff — or other slicing and dicing that has become a Wall Street obsession — is, first, food and energy are crucial to families and, second, the topline number really tells you whether your purchasing power and your standard of living is doing better or worse. 

The answer is still worse, but at least we’ve come way down from the 9 percent-plus readings a year ago. Bear in mind, though, that consumer prices have increased 14 percent since January 2021 when President Biden took office.  

That’s another way of saying the dollars in your wallets and purses are worth 14 percent less than two years ago.  

I’ll also warn: food prices are up 10.1 percent over the past 12 months, and that includes groceries at home — up 11.3 percent. That’s a nasty number and frankly it has not improved much at all, despite the Fed’s tightening move.  

That is a very key issue for middle-income working people and for lower-income people. Also, it’s worth noting that real wages dropped by 1.8 percent year on year, another measure of declining living standards.  

This has always been the soft underbelly of the Biden economy. It’s the reason why people think they’re worse off than they were two years ago or a year ago, and why they have no confidence in the president.  

I’ll do my once in a year reference to John Maynard Keynes: “Inflation is the cruelest tax of all.”  

Now, inside this story, there is some good news. The inflation rate has eased, as I mentioned earlier, and then there are some other factors that look to be counter-inflationary. 

Namely, the CRB commodity index has been flat for the last six months, after dropping significantly this past spring — and that’s a good sign for lower future inflation. It also suggests that the commodity value of the dollar is steadily stabilizing and improving. That’s a good thing.  

This is what happens after the Fed starts raising its target rate to 4.75 percent from zero percent, and I reckon they’re going to take it up several more notches.  

More controversially, the broad M2 money supply has been plunging in the past year, after skyrocketing before then.  

The toughest nut to crack is the deeply inverted yield curve, where the 3-month Treasury bill rate is almost 4.80 and the 10-year bond is 3.75. This is a leading indicator of lower inflation, but it’s also a leading indicator of recession.  

Last evening, a former Fed governor and Ronald Reagan appointee, Robert Heller, suggested the Fed’s target rate would go up to 6 percent, and he predicted a double-dip recession. The first dip was the first half of last year, and the second dip looks to be the second half of this year.  

I am reporting here, not forecasting, but I basically think Mr. Heller is leading us in the right direction. 

Now, here’s the rub.  

Judging from Mr. Biden’s State of the Union message, and virtually everything else he’s said before then, every part of his economic agenda is inflationary. Massive central planning. Stifling oil and gas. Waging war against business. Regulatory control of nearly every part of the economy. And an across-the-board phalanx of higher fees and taxes.  

Basically, Mr. Biden wants unlimited welfare without workfare, and wants higher taxes on successful earners, entrepreneurs, producers, and investors. He thinks he’s waging war against rich people, and that’s bad enough, but he’s actually waging war against jobs and those who hold them.  

Mr. Biden is a Bernie Sanders Democrat, also known as a big-government socialist. He likes employment; he just doesn’t like employers.  

He wants a government-run economy, which will over time increase demand, but he wants to stifle innovation and productivity, which will hold down the production of goods and services.  

He’s a spender. He’s a borrower. He is therefore an inflator.  

So, like everyone, I’m glad to see the inflation rate come down a bit, even if 6.5 percent inflation would’ve been utterly unheard of two years ago. If Mr. Biden gets his way, though, it won’t last, and that’s the problem with this whole story.  

Save America. Give me limited government, lower taxes, fewer regulations, and a sound dollar.  

From Mr. Kudlow’s broadcast on Fox Business News.