Is an Inflation Killer on the Loose?

Apple Podcast Spotify

Is an Inflation Killer on the Loose?

If you ask the average person if inflation is an issue, almost 100% will say, absolutely. In today’s episode, I’m going to share some of the reasons that inflation grabs our attention. In other words, I’m going to try and share what it is about inflation that causes us to think things are even worse than they really are. But I’m also going to share some good news – some developments that have the potential to limit the inflation we have all come to loathe in the last 6 years. So, let’s get to it.

We have just come through the largest run of inflation since the 1970’s. I took a look at the Consumer Price Index for every year since 1970 to get a more exact comparison. Inflation started to move out of the norm in 1973 and continued to do so until 1982. That was 9-years of runaway inflation. In 2021 we saw a return of inflation with it eventually peaking in 2022 at 8%. That made 2022 the highest year of inflation since 1981. It came down some in 2023 and improved even more in 2024. So, one of the reasons people talk about inflation is because it’s not just perception, it’s real.

Broad price increases often doesn’t go the other direction. In other words, with the exception of commodities, once prices reach a certain level, they don’t go back down. They created a new “high water mark.” So when I say that inflation came down some in 2024, that doesn’t mean that prices went down, it means that the rate of broad price increases slowed. That means, for the most part, we are stuck with many prices where they are. This is the new normal, and that has us remembering when we could pay x amount of dollars for a good or service way back when.

Some of the things that we use the most have gone up in price the most. I’ll highlight two: Home Costs and Beef. Let’s start with home prices. Personal experience has shown me houses in Jackson TN that were roughly $200,000 prior to the pandemic, are now on the market for $350,000. Rents are even worse. I don’t have to give you statistics because you have seen this yourself. Everyone feels this increase in housing costs, whether you are a renter or a buyer. Additionally, food costs are higher and you feel it if you buy ground beef. According to the L.A. Times, it was up almost 15% from January of 2025 to January of this year. A shortage of cattle herds has ground beef costing $6.75 per pound. Not everyone eats beef, but it affects lots of folks. Everyone is affected by housing costs.

Price decreases never make headlines. You probably already knew beef was high, but you probably haven’t thought about the relief you have gotten from eggs. According to CNBC, egg prices are down 34% in January of this year vs. last year. A dozen eggs topped out at $6.23 back in March of 2025. You were paying more for a dozen eggs than a pound of beef. That has come down to $2.71 now. Still a little high historically. The reason for this was a breakout of bird flu that wiped out almost 10% of the egg laying hens in the country according to the USDA. My point is that you probably notice prices going up. It is less common to notice them going down. I remember gas at over $4 per gallon back in 2005 following Hurricane Katrina. But you rarely hear people going to pay $2.50 for a gallon of gas today saying, “I sure am glad I’m not paying $4 like I was 20 years ago.”

So, things cost more, I don’t have to convince you of this. In previous Podcast episodes I have encouraged you to get used to the prices of things going up. My main reasoning has been that I believe we will have a labor shortage in the future. I think we have a labor shortage now. But I’m beginning to rethink this assumption as we see the AI revolution continue. We still have a labor shortage. And yet, we are seeing layoffs at major companies all around the country. How is this possible? It’s the AI Revolution. It seems like every week, we hear of new things that new models are able to do. Yesterday, Anthropic shared that their AI tool, Claude, is able to do basic computer programing in the COBOL language. As a result, IBM stock was down the most in one day since the year 2000. It is true that AI is coming for lots of jobs in the knowledge economy. But I don’t think this is the beginning of a job apocalypse. Rather, I think it is the beginning of the age of Digital Productivity. Economists call this phenomenon creative destruction. When cars started to be manufactured – it reduced the need for buggy repairmen and horse trainers. In that sense, it destroyed some of the jobs of the day. But it also created new jobs. People were needed to put these new contraptions called cars together, and others were needed to keep them on the roads. One set of jobs destroyed, a host of new ones created. AI will take the place of a host of manual processes that are done by humans today. But new jobs will be needed to guide AI, to analyze what AI is producing, and to make decisions in light of the production of AI. To go back to the earlier example of Claude being able to do basic programming in COBOL, computer programmers will not be rendered obsolete, but the composition of a computer programmer’s job will change dramatically. So I don’t think we are facing economic doomsday. On the contrary, I think that AI is going to make us more productive than we have ever been. By productive, I mean that in the economic sense – that businesses will be able to create more output with less cost. In that sense, AI is a force that could counteract the labor shortage we are facing demographically. If this happens, in the long run, this could dramatically lower costs. Certain things might even go down in price. Think of the personal computer. Interestingly enough, they are even less expensive than they were when they came on the scene in the early 1980’s. TVs are drastically lower in cost than the first flat screens that hit the market. Productivity can lead to a lower cost to produce things, which can lower the cost of buying those things. The mandate for every company in the AI age is to harness it to do more with less.

But let me be clear, AI is no panacea. It isn’t going to create a utopia. There will be certain things that cannot be replaced by AI. If we don’t have people going into those occupations, we could see prices going up on those goods or services. There will be misuses of AI. There will be mistakes made by AI. There are a host of potholes that lie ahead. But every new technology faces this bumpy road. We will learn from the mistakes, and we will get more productive as we go. We are all groping in the dark to some extent at what AI can even really do. But as we apply it to certain areas of our business, we will learn.

So, here are some takeaways from today:

Have an open yet careful posture towards AI. Don’t devour it without wisdom guiding you, or you will make a wreck of people and things. But you cannot hide your head in the sand and pretend that it won’t affect you. Try it out in small doses and in low impact applications. Also remember, unless you are paying for security for your AI model, the information you share with it is not private. Be careful that you don’t share personally identifiable information of your customers with AI unless there are safeguards in place to protect the data. Be wise as you interact with this new technology.

Consider the value of the trades. There are certain things AI can’t do yet and may not be able to do for a very long time. Working with your hands is back in vogue.

Learn from others. Talk to them about how they are using AI. Share use cases and share mistakes and what you have learned from them.

Learn from AI. It will tell you what it can and can’t do. There is no doubt, it is more confident than it should be and makes mistakes quite often. But you will only figure this out if you test it and then compare its results with other reliable means.

As I have said before, those who figure out how to harness it well will be the winners in this Digital Productivity Age. And if there is no intervention that manipulates the money supply, it could actually be an age where inflation is not out of control. So, is an inflation killer on the loose? For now, I think we would settle for an inflation governor, and it is possible AI may do that very thing.

Banking will be changed with AI without a doubt – but we believe that in small town rural America, there will always be a desire to interact with a human being to help you meet your financial goals. At Foundation Bank, our human component is our strongest component. We have caring, competent teammates who will call you back, who will follow through with what they say they will do, and who will help you meet your particular financial needs. Visit foundationbank.org and start your financial conversation with us. We hope you’ll subscribe to this podcast to it in your favorite podcast app and share it on social media. Until our next episode, God bless you.

-President Chad P. Wilson, CFP

Today’s episode of “Money Matters” was written and recorded by President Chad P. Wilson of Foundation Bank/McKenzie Banking Company on February 24, 2026. This episode does not constitute financial advice. Please consult a financial professional to discuss your specific needs. Any rates mentioned are subject to change and are accurate as of the recording date. Foundation Bank/MBC is an Equal Housing Lender, Member FDIC.