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I have been commenting for a while now that I think the peak for inflation is behind us, at least for this cycle. This shouldn't be surprising, as inflation is a lagging indicator. By that I mean that it usually peaks after the economy has already peaked, and this time appears no different.

The first sign that I felt inflation was subsiding was the top in bond yields, as the 10-year is an astute indicator of future inflation. The the commodity indexes began to rollover, including oil, gas, gold, etc.

Today, the "prices paid" component of the ISM Index came in at just 47.0, a big monthly decline from 61 and well below expectations. This shows an actual decline in prices paid, and is another good indicator that inflation is no longer the primary danger to the economic expansion.
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