Economists, including Paul Krugman, are advocating for the Federal Reserve to increase its inflation target from 2% to 3%. They argue that a higher target could cushion the economy against severe recessions and boost investment. However, Krugman disagrees with Jason Furman's assertion that there is more work to do, suggesting that with current inflation measures around 3%, victory should be declared. Higher interest rates have been cited as a reason for slowing demand for products and services, with Tesla's CEO stating that they may force the company to lower prices, impacting profitability.