The numbers we got on inflation Wednesday were good numbers. Really good numbers.

The consumer price index for June came in kinda like a lamb — milder than economists predicted: up 0.2% from May and just 3% from a year ago. At that point, remember, inflation was running three times what it is now.

The news was also pretty good on what’s called core inflation, which excludes food and energy prices, since they can be volatile. 

The Federal Reserve’s been worried about that because it’s been sticky and hard to push down, but annual core inflation in June, at 4.8%, was down half a percentage point from the May reading. That’s the lowest level since the fall of 2021.

Thing is, none of these numbers is low enough to satisfy the Fed in its cage match with inflation.

Consumer prices rising just 3% a year — that’s kinda what success in inflation fighting looks like, said Joe Brusuelas at consulting firm RSM.

“Consider that just 12 months ago, we were facing down 9% with risk of it surging to 10%. This is considerable progress on the part of the Federal Reserve,” Brusuelas said.

Services inflation is moderating, which the Fed’s been hoping for. Airfares were down 8% in June alone.

“We’re past peak revenge travel. That’s the kind of data that the Fed can hang its hat on,” Brusuelas said. But not relax its vigilance before hitting its 2% target.

“You know it’s a lot easier, say, to get inflation from 8% to 6%, 6% to 4%, than it is to get it from 3% to 2%,” Brusuelas explained.

Especially as long as certain prices are still going up. Rent, for instance, is up more than 8% a year.

But that could be changing, said Lawrence Yun at the National Association of Realtors.

“Apartment construction today is at 40-year highs, empty units ready to hit the marketplace. Owners of properties simply cannot jack up the rent, knowing the competition out there,” Yun said.

Consumers are feeling better about where prices are going, said Joanne Hsu, director of the University of Michigan surveys. 

“Consumers definitely believe that we have turned a corner,” Hsu said.

They expect lower inflation a year from now, and the Fed follows such expectations closely. 

With all this good news on inflation, might the Fed just stop hiking interest rates? Brusuelas doesn’t think that’s very likely. 

“It’s just going to be a long, hard slog to get back to 2% overall. The Fed has been very transparent about this,” he said.

The central bank now predicts inflation won’t hit its target until 2026 at the earliest.