NEW YORK (CNN/Money) - Economists may be popping champagne corks, celebrating the end of the jobless recovery, but Fed policy-makers are moping around like the Masque of the Red Death, warning the plague is not over quite yet.

Some economists hope the Federal Reserve is just play-acting, that the central bankers really don't believe their own gloomy aspect, and -- like Prince Prospero in the Edgar Allen Poe story -- they're angrily urging the policy-makers to take their masks off.

After their meeting, which began Tuesday morning, Fed policy-makers probably will slip the mask aside for a minute, at least, to note the recent strength in economic reports -- but significant changes in the central bank's policy probably are still months away.

"The Fed will be more upbeat, but there's still a long way to go before they make any move," said Robert MacIntosh, chief economist at Eaton Vance Management. "This economy is just beginning to really grow. Until we get real job creation, there will be no inflation worries -- and we're not there yet."

The central bank's policy makers are widely expected to hold their target for the federal funds rate, an overnight bank lending rate that influences other key bank rates, at 1 percent, a 41-year low. The Fed's announcement is due Tuesday afternoon.

They also are expected to hold the same two-headed outlook they've used in many of their recent rate-decision announcements, including their latest, in September: The economy is likely to keep getting better, but corporate pricing power likely will keep getting worse.

"The bottom line is that their principal concern is that inflation might go lower, so we'll get the same kind of statement we got last time," said former Fed economist Lyle Gramley, now a consulting economist with Schwab Washington Research.

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Typically, the Fed is a different sort of party pooper, raising interest rates to fight inflation as the economy strengthens -- taking away the punch bowl just as the party gets started, in the words of former Fed Chairman William McChesney Martin.

Some economists worry that, by keeping short-term rates super-low, flooring the economy's accelerator even as growth is already picking up, the Fed could start to look out of touch -- and could be flirting with a possible spike in inflation.

"When [Fed policy-makers] meet on Oct. 28, they will be looking at a broad-based economic expansion. Will they admit to that?" said Joel Naroff, president and chief economist at Naroff Economic Advisers in Holland, Pa. "They are going to have to face reality soon and become tilted toward growth and at least neutral on inflation."

But other economists disagree.

In their view, the economy still has far too much "slack," in unused workers and production capacity, to put much upward pressure on inflation.

Employers have cut 2.7 million jobs since February 2001, right before the latest recession began, according to the Labor Department, and September's addition of 57,000 jobs does not a job boom make. Meanwhile, factories are using less than 75 percent of their total production capacity, according to Fed data.

And the Labor Department's core consumer price index, which strips out food and energy, grew just 1.2 percent in the 12 months ending in September, the slowest pace in 37 years.

While low prices are wonderful for consumers, they can sink corporate profits, which can lead to a vicious cycle of job cuts, falling demand and more falling prices -- also known as deflation, which has bedeviled the Japanese economy for much of the past decade.

According to Fed Governor Ben Bernanke and others, even the robust economic growth in the third quarter -- up to 7 percent, according to some of the most optimistic forecasts -- was not enough to take up all the economy's slack.

"We needed 20 percent economic growth in the third quarter to get rid of all of the excess capacity in the economy," Lehman Brothers chief economist Ethan Harris said. "The Fed is still going to be concerned about disinflation."

Whatever the Fed's course of action, it will have to approach it gently, for fear of triggering a sell-off in bonds, which would push long-term rates higher, possibly choking off the recent pickup in economic growth. Bond prices and yields move in opposite directions.

In fact, Bernanke and other Fed officials have not entirely ruled out rate hikes -- Bernanke has said only that the Fed doesn't need to undertake "significant tightening."

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Then, on Oct. 16, San Francisco Fed President Robert Parry said the Fed could keep an easy-money policy even if the fed funds rate rose a bit. And on Oct. 20, Treasury Secretary John Snow -- who eats breakfast with Fed Chairman Alan Greenspan regularly -- made comments that caused financial markets to believe a Fed rate hike was on the way sooner than they expected.

Though Snow was widely derided for overstepping his bounds, some observers wondered if all these comments weren't part of an effort to gently prepare bond markets for a shift in policy.

"The Fed doesn't want sudden market reactions in response to news that might be difficult; they want to cause as little volatility as possible," said Anthony Crescenzi, bond market analyst with Miller Tabak & Co. "Greenspan has admitted to sending signals in the past -- it's the way they operate."