The Fed has a dual mandate to keep inflation under control and stabilize employment.

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QE3 could conceivably make it harder for the big emerging markets like China and Brazil to keep inflation under control.

FORBES: Matter Of Time Before QE3 Sets Sail

The Bank of England has already increased interest rates four times in the past six months to keep inflation under control.

BBC: Sterling strength tames inflation

The ECB last raised its key rate to 3.75% in March and Trichet's comments after the Bank's last meeting in May that "strong vigilance" was needed to keep inflation under control, were taken as a signal that rates would go up this month.

FORBES: Magazine Article

With inflation under control, central banks are inclined to keep interest rates low and thereby unwittingly accommodate an unsustainable boom in credit and asset prices.

ECONOMIST: Yesterday's financial architecture needs refurbishing

On inflation, the Fed chairman said that while high energy prices continue to be a source of risk, ongoing productivity gains in the labor market should keep wage increases--still the biggest driver of overall inflation--under control.

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