Wholesale prices rose moderately last month reports the Associated Press. Gasoline dropped and that balanced a jump in other sectors.

The bad news is that the core rate (everything except food and energy) jumped 0.4 percent which would add up to an annual rate of nearly 5 percent. And that would be a big jump. Higher prices for new cars and light trucks, pharmaceutical products, books and civilian aircraft fuelled the unexpected leap in inflation.

The January jump will put the spotlight back on the Fed. As Chairman Ben Bernanke told Congress this week energy is such a pervasive factor across all sectors of the economy that it can kick inflation up. Remember our old friend from the 1970s, double-digit inflation? That got started with the huge price hikes in gasoline from various OPEC machinations and Arab embargoes.

The price of gasoline actually fell in January but higher energy prices last year seem to be part of this month's rise in prices across various sectors of the economy, so the Fed will likely keep ratcheting up interest rates.