Should we care about inflation? — Fed Chair Jerome Powell takes the stage at 2:30 p.m. after a Fed statement that is not excepted to include any changes to the foot-on-the-gas monetary policy aimed at boosting the economy as it continues to struggle — especially on the services end — with escaping the massive drag from Covid-19. But hanging around in the background will be worries that if we should — God willing — emerge from the Covid nightmare in the second half of the year, massive pent-up demand and heavy savings among higher-earners will lead to a dangerous blast of price inflation that could slam into President Biden's hopes for a strong recovery. To be sure … To use the cliché journo-jargon for a third or fourth story paragraph, the big risk right now is not inflationary. It is that new strains of the Covid-19 virus and troubled vaccine distribution will delay any robust recovery, not that full freedom from Covid will explode prices on travel and hotels and everything else that people have not been able to do for going on a year. But the risk of an inflation spike remains out there and a concern to economists and central bank (and Biden White House) officials. It's not often we have this kind of totally bifurcated economy in which the lower end of the income spectrum is barely hanging on while the upper end has piled up tons of cash and wants to put it to use. Via Jim Bianco, president and founder of Bianco Research, who has been flashing some warnings for a while now: "The consensus seems to favor the idea of reflation, but there are worrisome signs that inflation may be an issue. First, personal income has been booming … "With $900 billion more in stimulus just approved and … Biden pushing for trillions of dollars more, the idea of faster inflation tied to increased demand stemming from booming personal income does not seem too far-fetched. … "Second, the economy is smaller than it was a year ago. The country is producing fewer goods and services to purchase. The concern is that, whenever vaccines take hold, the mix of more money chasing fewer goods could prove problematic." Via Richmond Fed President Tom Barkin as told to our Victoria Guida : "You clearly do see inflation today in certain parts of the economy, I talked to a steel manufacturer yesterday who talked about price increases they're seeing in steel and other construction materials. … You'll see some services, think airlines and hotels, where clearly prices are still depressed. … The question of whether you start to see it increase on a 12-month basis after the summer gets down to whether you think you're going to have significant pent-up demand and whether that's going to meet constrained supply." "All of those suppliers, think airlines, have on notice, don't worry we're going to have a vaccine, 50 to 70 percent deployed circa April, June, August, pick your timeframe. … 'Okay great, I'll bring some of those aircraft out of the desert, and I'll schedule to meet demand.' … Some people will be too optimistic, and some will be too conservative … but I guess it's not obvious to me that there's some fundamental constraints that this pent-up demand's going to hit when you've got, call it six- month lead time." Via Richard Bernstein Advisors: "For the past several decades, investors have generally been playing limbo with inflation. No matter how much they lowered their expectations, somehow inflation seemed to squeeze under the bar. The limbo dance could be over. Investors should now realize inflation expectations are set very low and inflation seems increasingly likely to hurdle that very low bar." GOOD WEDNESDAY MORNING — Email me on bwhite@politico.com and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver on aweaver@politico.com and follow her on Twitter @AubreeEWeaver. | 
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