GAME, point, and possibly even match to Fed chairman Alan Greenspan. When he and his monetary policy committee raised interest rates by only 0.25 percent a few weeks ago, the inflation hawks were out in force. The economy, they said, was overheating, and the Fed chairman, wedded to the view that rising productivity would keep costs and prices under control, was refusing to take the vigorous action necessary to head off an impending inflationary surge. Rates should have been raised sooner and faster, they argued.

In the event, it turns out that Greenspan had it right. Late last week the government reported the largest drop in wholesale prices in a year, with energy and food leading the declines with declines of 1.6 percent and 0.6 percent, respectively. Excluding those volatile elements, “core” wholesale prices rose only a modest 0.2 percent in June. Consumer prices also showed no signs of the inflation that so worries the hawks: core inflation rose a tiny 0.1 percent.