The bad news: the U.S. is also seeing its worst inflation in 40 years. Krugman revisits the inflation issue in his April 12 column, predicting that “inflation will probably fall significantly over the next few months” but warning, “the better numbers we’re about to see won’t mean that the inflation problem is over.”“The inflation report for March came in hot, as expected: Consumer prices are up 8.5% over the past year,” Krugman notes. A lot of Russian oil is probably still reaching world markets, and President Biden’s million-barrel-a-day release from the Strategic Petroleum Reserve makes up for much of the shortfall. “The good news is that there’s still no sign that expectations of high inflation are getting entrenched the way they were in, say, 1980,” Krugman observes. “Consumers expect high inflation in the near future, but medium-term expectations haven’t moved much, suggesting that people expect inflation to come down a lot.”

Source: New York Times April 14, 2022 15:25 UTC