National newspapers and morning news programs sounded the inflation alarm this past week. The numbers are being watched closely as everything we buy from oil to ink seems to cost more these days.

But federal officials this past week said while they are watching inflation, they remain optimistic it is manageable and the economy's performance will show moderate growth this year. The second quarter growth won't parallel the first, but it will still be positive.

"We analyze these numbers very systematically," Federal Reserve Gov. Randall Kroszner told Reuters News Service. "They are all within manageable ranges.

Mr. Kroszner said the reserve governors try and spot trends in the rising costs of raw materials that will eventually be passed along in consumer and business products.

The government reported this week that core consumer prices were up 0.3 percent in May and nearly 2.5 percent from a year ago.

The impacts of high energy costs can't be discounted, though. Some analysts are predicting $4 per gallon gasoline. Those costs are shifted to just about every product purchased. Fuel surcharges, attached to business deliveries are becoming routine.

The Chairman of the Federal Reserve, Ben Bernanke, helped quiet rowdy financial markets Thursday by saying the impact of high energy costs on other prices has been limited. Investors fear a rise in interest rates, the 17th in two years, might soon follow.

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