Kudlow: The Federal Reserve never seems to talk about this

Economic Overview - The economy is experiencing a disinflationary supply-side boom with strong growth and easing inflation pressures, as indicated by a 2.3% annual increase in core PCE over the past three months [1] - The three-month core CPI stands at 1.6%, while the topline CPI is at 2.1%, suggesting low inflation rates [2] Labor and Productivity - Unit labor costs, which reflect wages relative to productivity, have increased by just over 1% in the past year, indicating a productivity-led economy that is counterinflationary [2] - Full-cost expensing is driving a boom in business capital investment, further promoting productivity growth [3] Energy Prices and Tariffs - Energy prices, including gasoline, have been declining for a year, contributing to counterinflationary trends, yet the Federal Reserve does not address this [3] - Despite concerns about tariff inflation, goods prices have remained below the Fed's 2% target rate, indicating that the anticipated inflation from tariffs has not materialized [4] Market Reactions and Interest Rates - Financial markets react negatively to good economic news due to fears that the Federal Reserve will increase interest rates, potentially stifling economic growth [5] - Questions arise regarding why U.S. bond rates are higher than those in countries like Japan and China, despite stronger economic performance in the U.S. [6] Federal Reserve's Approach - There is a call for a change in the Federal Reserve's approach, advocating for a dismissal of outdated models and attitudes regarding growth and inflation [7]