Are we still experiencing inflation?

Economist and New York Times columnist Paul Krugman argued that the US economy has exited an inflationary period. Citing the Federal Reserve’s economic data, Krugman said inflation has sharply decreased since March 2022.

Why should we care?
With Wall Street loudly gearing up for an impending economic implosion, the financial sector and the general public alike believe the US is in dire economic straits. Krugman contended that, while the US economy is in less-than-ideal conditions—whether due to supply chain issues, an ongoing pandemic, or the Russian invasion of Ukraine—it’s doing significantly better than it was even a few weeks ago. Most notably, Krugman argued that gas prices are poised to come down from their mid-June peak. If Krugman’s arguments hold weight, then these improved economic conditions can have serious—including potentially positive—effects for fintechs and other financial players. Consumer savings may be less stretched than they were previously, moving competition away from savings-adjacent products like credit-card rewards programs and toward spending-focused tools like BNPL. Granted, if interest rates remain high, or go even higher, then consumption may stay relatively timid, and savings-focused services might see consistent demand. The long-term viability of Krugman’s prophecies lies in the Fed’s hands.