American families finally saw some financial relief in June as prices at the pump fell. Those lower fuel prices pulled down the consumer price index (CPI) by 0.4% in June, the largest monthly decline since April 2020. But don’t pop the champagne corks just yet, because that improvement has started reversing this month.

Alas, June’s lower prices weren’t the triumph of sound monetary or fiscal policy, but a peace dividend that effectively reversed price increases from May. The annual inflation rate, as measured by the CPI, fell from 4.2% to 3.5%, led by energy prices cratering 5.7% in a single month, with gasoline down almost 10%.

Energy prices were lower because the June 17 memorandum of understanding with Tehran delivered a ceasefire and the Strait of Hormuz—the passageway for one-fifth of the world’s crude oil—began reopening. Tanker traffic climbed back toward 18 to 22 transits a day, and crude prices retreated to pre-war levels, directly impacting the June CPI data.

The producer price index (PPI) told the same story, as it declined........

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