Well, it痴 official but no surprise. Today the Federal Open Market Committee said: (I highlighted a few key phrases)

"The slowing of the growth of real GDP in the fourth quarter of 2005 seems largely to have reflected temporary or special factors. Economic growth has rebounded strongly in the current quarter but appears likely to moderate to a more sustainable pace. As yet, the run-up in the prices of energy and other commodities appears to have had only a modest effect on core inflation, ongoing productivity gains have helped to hold the growth of unit labor costs in check, and inflation expectations remain contained. Still, possible increases in resource utilization, in combination with the elevated prices of energy and other commodities, have the potential to add to inflation pressures.

The Committee judges that some further policy firming may be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance. In any event, the Committee will respond to changes in economic prospects as needed to foster these objectives."

Translation:

1) Energy and Commodity prices have gone through the roof, but since energy prices are not factored into the inflation numbers, we cannot tell you there is inflation. Oh, one more thing; the pain you are feeling at the pump when you fill up your car, that's not inflation. And don't worry about those higher housing price, that痴 just an illusion.

2) Higher Energy and Commodity prices have not showed up in the prices we pay for goods made from manufacturing plants we have outsourced to other countries, but they might have the potential to add to inflationary pressures down the road. If U.S. corporations have to begin paying Indian and Malaysian workers more than a dollar an hour, we will really begin to see the effects of inflation.

3) We are going to continue raising rates because there are inflationary pressures that we are seeing, but are not factored into the inflation data reported to you. Don't worry; the great and powerful oz has everything under control.