Interest rate I: Why does the Fed need to raise Interest rate? 息口系列一： 點解聯儲局仲要加息？

In this wednesday and thursday, the US Federal Reserve will decide the adjustment of interest rate again. And it is expected that the new Fed chairman Bernanke will raise the Fed interest rate by 0.25 to 0.5 percentage points. What are the factors leading to the continuely raising of interest rate?
Actually, interest rate is a very important and essential factor in the global economy. Interest rate not only can affect the cost of borrowing or lending money, but also the investment rate, the consumption and production rate, employmant rate as well as currency exchange rate.So, to decide whether increase ,decrease or maintain the cuurent interest rate, we need to take a look on some reference index like Consumer Price Index, employment rate, GDP...etc.
Firstly, let's take a look on CPI. CPI is actually an index indicating the condition of inflation and deflation. If the CPI increase like the past three months(May, April and March), it means that the market have great pressure on inflation. In order to control the inflation, it is certain that the Fed would raise interest rate.
Secondly, we look at the US employment rate. US Bureau of Labor Statistics would periodatically announce the US unemployment rate. The lower the unemployment rate would imply the greater pressure to inflation, and therefore the interesr rate. For May, there are only 75,000 new posts for workers, which is lower than expectations. Though the overall unemployment is lowered by 0.1% from April, the market do not think enough.Thus, it will only bring little pressure to the interest rate.
Thirdly, GDP(Gross Dpmestic Product)!As the second quarter US GDP is not yet announced, so the writer cannot guess its effect on interest rate. In general, if the GDP grows too fast , the Fed would raise interest rate so as to control the consumption and therefore maintain a stable but not overheated economy.
All in all, US Fed will also take look at different other economic index and statistics, before making their decision on interest rate.Generally, inflation problem still occurs in US. Thus, the market would expect the Fed to raise interest rate, but exactly how much? We can wait to thursday's offical announcement.