The Fed’s not freaking out about inflation, and neither should you

[Bloomberg]( Follow Us [Get the newsletter]( This is Bloomberg Opinion Today, an inflation-protected security of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - The Fed is [rightly calm about inflation](. - Germany is [not hungry for a new cold war](. - Biden [must bolster Obamacare](. - China’s [South Korea impression is a flop](. The Market Kids Are Alright Fed Chairman Jerome Powell spoke in Congress today, which are words that are very boring to type. It wasn’t even the day’s most interesting congressional [hearing](. But with trillions of dollars hanging in the balance, every Powell utterance carries the weight of at least one (1) stimulus package. And Powell did not disappoint. [He was sanguine about a recent jump in long-term bond yields]( and didn’t do anything dumb, such as hinting he’d sway one iota from giving the economy full gas, writes Brian Chappatta. Short-term interest rates haven’t moved, and even long-term rates are barely above epochal lows. And they’re likely forecasts of a stronger economy ahead, not some sign hyperinflation is about to travel here in a time machine from the ’70s. The outlook for the economy is certainly looking rosy, thanks to Covid vaccinations and stimulus spending. But it’s still uncertain, which means [Powell and his peers around the world will keep giving markets]( what they want, writes John Authers. Inflation should in fact come back from the dead this year, but, as with slightly higher bond yields, this is just a symptom of economies springing back to life and nothing to worry about, writes Bill Dudley. It will take a long time to return the economy to full health, and [longer still to build an inflationary juggernaut](. With everything this wonderful, it’s the perfect time to buy stocks, you might think. Nope. [It’s actually the perfect time to sell]( them, writes Jared Dillian. This is based on the thesis that the best portfolio-management strategy is the [George Costanza]( model: Take whatever your instinct is and do the opposite. When the going gets easy is when the smartest investors make like Costanza and [flee the room](. We often compare markets to children who are prone to throw [tantrums](, when they are in fact populated by grown adult humans that own houses and sometimes boats. Adults do get upset when markets go down, preventing them from buying more houses and boats. But if bonds and even stocks fall on stronger growth, then that’s actually a sign of [maturity](.  Further Markets Reading:  Canada just [approved a Bitcoin ETF](. What’s keeping the SEC? — Mark Gilbert Paid Post Highest Paying Cash Back Card Is Here. $200 bonus offer. [3% cashback choice]( on every category we love, including online shopping, dining, travel, gas, and more. No annual fee. 0% interest until 2022. [Learn more today!]( Wise Bread Sprechen Zie New Cold War Yesterday we wrote about the [prospects]( of having a fun, hip cold war for a new generation, this time with China. We also noted it would once again take strong [alliances]( to help the U.S. win. One of America’s biggest allies in Cold War I was Germany (the western bits). Unfortunately, the current version of Germany [isn’t eager to commit to another buddy movie](, writes Hal Brands. Some of this is due to the legacy of the first cold war, which Germans think was won by charming the opposition. Some of it is also the fact that Germany simply sells a lot of stuff in China. The U.S. is going to have to be pretty charming itself if it wants to woo Berlin fully to its side. It doesn’t help America’s cause that [China is doing a much better job sharing its Covid vaccine]( with the world than Western nations are, as Lionel Laurent notes. Even Cold War I heel Russia is running circles around most of its old opponents. Part of America’s charm offensive must involve matching that soft power with its own. Further Cold War II Reading: - In cracking down on Hong Kong democracy, [China is breaking a promise by Deng Xiaoping](. — Matthew Brooker - China’s effort to [weaponize rare-earth refining technology]( will just inspire targets to find other sources. — David Fickling For Your Health Life expectancy worsened dramatically in the U.S. last year, as did [the lifespan gap between rich and poor and Black and White]( Americans, writes Peter Orszag. And you can’t just blame the coronavirus and its K-shaped pandemic and recession. Much of it was people simply not going to the doctor for months on end. Just in case you weren’t sure that was bad. Even without a pandemic, millions of Americans forgo life-saving routine health care because they can’t afford it. To that end, Bloomberg’s editorial board writes, President Joe Biden and Congress should [undo as much of the damage Donald Trump did to the Affordable Care Act]( as they can, as quickly as they can, and then strengthen it, so it can affordably insure more people. Bonus Policy Reading: Making [minimum wage increases automatic](, as a Republican proposal suggests, would hurt the labor market. — Michael Strain Telltale Charts [China tried to emulate South Korea’s chaebol system]( to build industrial conglomerates, but its efforts are failing, partly because they have the wrong ambitions, writes Shuli Ren. Hoping to catch the next Tesla, investors bid up a Michael Klein SPAC that was buying Lucid Motors. Now that the deal has been announced and Lucid’s financials are out, investors realize to their chagrin [they’ve got the setting-all-the-cash-ablaze version of Tesla](, writes Chris Bryant. Further Reading [Federalism is an idea whose time has definitely passed](, as Covid, the Texas freeze and other crises demonstrate. — Noah Feldman A California lawsuit could encourage more people to [sue for contracting Covid from their spouses’ workplaces](. — Stephen Carter Joe Biden [can’t take military action off the table]( with North Korea. — John Bolton Home Depot and Macy’s both warned [pandemic shopping patterns may be lasting](. — Sarah Halzack [Mexico is blowing its shot to make its huge auto sector]( a winner in the shift to EVs. — Shannon O’Neil [Jay-Z’s champagne sale shows it’s often more lucrative]( for celebs to keep their names off their brands. — Alex Webb ICYMI Elon Musk [tweeted away $15 billion yesterday](. Tiger Woods [got in a car accident](. More [vaccine doses are coming](. Kickers Miners find [65-million-year-old opalized pearls](. [Noise pollution hurts the heart](. Scientists get [dreaming sleepers to answer questions](. 105-year-old Covid survivor credits [gin-soaked raisins for her health](. Note:  Please send opalized pearls and complaints to Mark Gongloff at mgongloff1@bloomberg.net. [Sign up here]( and follow us on [Twitter]( and [Facebook](.  Like Bloomberg Opinion Today? [Subscribe to Bloomberg All Access and get much, much more](. You’ll receive our unmatched global news coverage and two in-depth daily newsletters, The Bloomberg Open and The Bloomberg Close. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](.  You received this message because you are subscribed to Bloomberg's Bloomberg Opinion Today newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( Bloomberg L.P. 731 Lexington, New York, NY, 10022