Most Important Number of the Week Was 1.4%

There’s no shortage of economists and investors saying the U.S. is on the cusp of a rapid acceleration in inflation because of the trillions of dollars being pumped into the economy by the government and Federal Reserve just as consumers regain their mobility. The thinking is that this could force the Fed to tighten the purse strings prematurely, halting the strong rally in equities and other riskier assets — or worse. These worrywarts are only half right.

For now, inflation is quiescent. The government said Wednesday that the consumer price index rose just 1.4% in January from a year earlier, far below the Fed’s desired 2% target, helping trigger a rally in the bond market. The February reading should also be tame. Things become more complex after that. The March and April readings are likely to show a spike, but that will most likely be due to a drop in the inflation rate last March and April as the country shut down and people holed up in their homes. The inflation rate fell during those two months by the most since the end of 2014, and April’s decline was the biggest since the height of the financial crisis at the end of 2008, according to data compiled by Bloomberg.