Where’s the tariff inflation we’ve all been hearing about?

Where’s the tariff recession?

We’ve heard about it day after day, month after month, from the liberal press that wants to bring down President Trump and from Wall Street economists who should know better.

Yet the latest Consumer Price Index report for May shows inflation barely budged, up a tenth of a percent. And, since January, consumer prices are up only 1.4 percent at an annual rate.

Energy is down, apparel down, new cars down, gasoline down, core goods and commodities all down.

Nine months ago, when the inflation rate was twice as high as it is today, the Fed chairman, Jay Powell, slammed through a jumbo rate cut, which actually backfired — when long-term rates went up.

So, where’s Mr. Powell today? Missing in action.

The Fed funds rate right now is about one percentage point too high.

So, no wonder Mr. Trump is looking to replace Mr. Powell, as rumors swirl with names like the Treasury man, Scott Bessent; a former Fed governor, Kevin Warsh; and the National Economic Council director, Kevin Hassett. All brilliant people who would toss out the Fed’s failed models and start bringing in supply side economists.

There’s more on the early Trump economy, though.

The Atlanta Fed’s GDP tracker is showing almost 4 percent growth in the second quarter.

Employment continues to rise, while unemployment stays low at 4.2 percent.

Since January, federal government jobs have declined by 59,000, while private sector jobs have increased by 500,000.

Total wages for production workers are running above 4 percent year on year — almost three times the inflation rate.

The trade deficit for goods and services was $130 billion in January. In April, that deficit has dropped to $62 billion.

My friend Lord Conrad Black notes that “contrary to almost all predictions and much published fears, the President’s tariffs have not raised inflation and have not led to shortages of anything in the retail system of America.”

And he notes, and I totally agree, that the exporting countries who have responded to Mr. Trump’s reciprocal fair trade level playing field campaign are basically eating the tariff costs themselves. Meanwhile, roughly 130 countries around the world are still trying to make new trade agreements with America.

Mr. Trump will likely hold tariff rates steady for a while as deals are being made — including the recent Geneva consensus, extended through the London meeting of Communist Chinese and American negotiators.

One of these days, America will get even wiser and start a Manhattan-type project for rare earth minerals and little magnets to get out from under China’s pressure on something we could easily fix ourselves in three months.

Yet Mr. Trump’s genius, unflinching handling of the Los Angeles riots will give him even greater public polling support for his administration’s One Big Beautiful Bill.

And that bill’s 3 percent growth dividend, with its full cost expensing of factories, along with working class tax cuts and Mr. Trump’s strong law-and-order deportation policies, set the GOP up for a sweep in next year’s midterm elections.

You heard it here first.

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