The Fed Should Cut Rates Now. Sadly, It Won’t: Jonathan Levin

Thursday’s wildly encouraging consumer price index report shows that the Federal Reserve should be cutting policy rates at its meeting later this month. Unfortunately, they’ll probably keep us waiting until September.

On the inflation front, just about everything seems to be going right. CPI fell 0.1% in June from the previous month and was up just 3% from the same period a year earlier. Primary rents and owners equivalent rent — the heavily weighted and inertial housing categories that have bedeviled the Fed for two years — are finally cooling on what looks to be a sustainable basis. And used ...