But first, some good news. Oil prices are down to $91.50 per barrel this morning, and Treasury yields are drifting lower as well. For mortgage rates, that’s generally a positive sign.

Markets appear encouraged that the U.S. proposal for a ceasefire and the reopening of the Strait of Hormuz may be back on track. While nothing is guaranteed, investors are clearly responding to the possibility of reduced geopolitical tension and a more stable energy market.

So what is new Fed Chair Kevin Warsh likely paying attention to?

One metric getting a lot of attention is the Dallas Fed’s Trimmed Mean Inflation rate. Unlike Core PCE, which can still be influenced by larger price swings, the Trimmed Mean attempts to remove the most extreme price movements on both the high and low ends to provide a smoother view of underlying inflation trends.

That measure is currently running around 2.3%, much closer to the Federal Reserve’s 2% inflation target than many of the headline inflation readings grabbing the news.

Translation: there is a credible argument for lower interest rates if policymakers focus on the underlying inflation trend rather than the more volatile headline numbers.

The challenge, of course, is that methodology matters. Depending on which inflation measure you emphasize, the economy can look either very close to the Fed’s target or still well above it. That’s the debate the market is watching closely.

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