WASHINGTON (MarketWatch) — It’s a story that’s starting to pop up in financial circles: the U.S. dollar is so strong that it’s driving down prices on a range of goods that Americans like to buy, and in turn putting a ceiling on inflation.

The only problem with the story is that it’s not really true, according to analysis from Omair Sharif, a director at Newedge USA.

For sure, the dollar DXY, +0.73%  , as measured by the dollar index, has gone up by nearly 19% over seven months. That’s the sixth largest gain in any seven-month period going back to 1973.

The thing is, the dollar index is measured against a basket of six currencies including the euro and the Japanese yen.

If you look at the stuff Americans buy, they’re from countries that aren’t represented in the dollar index — mostly China, but also Mexico, India, Vietnam and Israel.

None of these nation’s currencies are in the dollar index. Almost 80% of U.S. consumer-goods imports, excluding autos, come from countries that aren’t in the dollar index, he says.

A better measure, what the Fed calls its “other important trading partners” index, has climbed just 7% over the same seven months. That’s a solid gain, but historically an unremarkable one, Sharif says.

So what’s explaining the recent sharp slide in import prices?

Import prices have collapsed by 5.5% year-over-year, and even excluding petroleum, import prices haven’t grown at all over the past year, according to the latest Labor Department data.

Sharif says it’s trends that have already been in place, like for televisions and cellphones. For example, there have been monthly drops in the series measuring prices for TVs, video and audio equipment 75% of the time since 1994.

Clothing prices also have tumbled recently. But he says the recent price declines have been due to discounting, not the dollar, since imported apparel costs as well as cotton have been on the rise.

The analysis has important implications for interest rates. The most important is that the dollar’s strength isn’t really flowing through into consumer prices. That in turns means Federal Reserve officials can have more confidence that core inflation will remain stable and eventually start rising. And finally, that means the Fed will have confidence to begin lifting interest rates later this year, Sharif says.