The minutes from the Federal Reserve's July 28-29 meeting indicate that most officials saw conditions for a rate liftoff as "not yet" achieved. They may be approaching a rate-hike moment, but they're not there yet.
Good call. That's right: Good call.
Tune in to "Closing Bell" at 4:20pm ET today. Larry Kudlow will be guest.
Important forward-looking, inflation-sensitive market indicators are actually heading down, not up. These include soft commodities, sinking oil, weak gold, a strong dollar, declining Treasury break-even inflation spreads, and a flattening yield curve. Add to that slow nominal GDP, a sluggish money supply, and falling velocity.
Today's CPI report for July shows virtual price stability, with a 0.2 percent year-on-year gain. So, the Fed is correct in stressing that inflation is not moving up to its 2-percent target. That's the message of markets and actual inflation indexes.
Now, I don't want 2 percent inflation; I want price-level stability. But the Fed, at least, is correct in pointing out that there are no upward inflation pressures that might call for a policy tightening. Plus, there are weak economic conditions in China, Europe, and the rest of the world, and a mediocre recovery in the U.S.
The fed-funds futures market is now showing a 45-percent probability of a target rate hike in September. We will see. Unless inflation-sensitive market-price-rule indicators pop up, I don't see any compelling reason for the central bank to move.
And let's not forget: The stock market, which is a leading indicator of the future economy, is in a wee bit of a correction. Given the recent rise of presidential candidate Donald Trump, we should all be thankful that stocks haven't plunged. Trump's agenda of trade protectionism, dollar devaluation, and immigrant deportation is completely anti-growth. It's like Fortress America in an economy that is completely globalized and where the U.S. must compete in the worldwide race for capital and labor. Trump's policies don't fit.
Instead of attempting to wall off America, we should be increasing trade, maintaining a sound and strong dollar, and building a new legal immigration system — one that will bring the best, the brightest, and the hardest-working people to America — rather than seeking mass deportation.
Last of all, and maybe most important, the best thing Trump or any of the GOP candidates can do to grow America's economy by 4 percent or better is to either slash or abolish altogether the uncompetitive, anti-investment U.S. corporate tax rate. And then the Fed could move toward normalizing its interest-rate and money-supply policies.
Read MoreWhy you should fear Trump
But right now that's not happening. So my message to the Fed remains the same: Move at the pace of an injured snail.
Commentary by Larry Kudlow, a senior contributor at CNBC and economics editor of the National Review. Follow him on Twitter @Larry_Kudlow.