I'm not unduly concerned about either {inflation or growth} yet.  It is certainly true that we are seeing now quite clear signs of moderation in demand in the economy.  Demand growth really seemed to be excessive a year ago.  A slowing is a healthy development.  We don't want it to proceed too far, but my view, I'm not not unduly concerned about what has happened, although I am watching incoming data as closely as I can.

I'm not unduly concerns about what I can see {on inflation}, but I would have to tell you, it's moving in the wrong direction, especially in the service sector.  I'm certainly not panicked yet, none of us are unduly alarmed, but this is our main job.

Australian Treasurer Peter Costello Thursday attempted to put out the fire sparked by his comments on US interest rates which have prompted calls for his sacking at home and sent US markets soaring to all-time highs.

The Australian Financial Review Wednesday reported Costello as saying US Federal Reserve chairman Alan Greenspan was "very optimistic" about inflation and dismissive of speculation about a rise in US interest rates.

Analysts in the United States had been on tenderhooks in recent weeks over whether the Fed was concerned enough about inflationary pressures to take the pre-emptive measure of raising interest rates.

From an AFX report

The inflation teakettle isn't whistling yet, but I think the temperature inside of it is rising rather markedly.