The Fed in concerned about the inflation

Bloomberg.com: Worldwide: "Bernanke's Forecast

Fed Chairman Ben S. Bernanke has forecast ``moderate'' economic growth this year, while remaining concerned about price pressures. A sustained decline in the inflation rate is ``yet to be convincingly demonstrated,'' Bernanke said last month in testimony to Congress.

The Fed's most recent regional survey, known as the Beige Book, showed last week that employment rose in most districts. Many locations also reported ``significant upward pressure on wages and salaries for in-demand, high-skilled workers.''

Not all economists are convinced wages are heading much higher. The unemployment rate is likely to rise in coming months as housing keeps contracting and manufacturing cools, said David Resler, chief economist at Nomura Securities International Inc. in New York."