The Federal Reserve (search) is poised to raise official interest rates again on Tuesday in its ongoing campaign to head off inflation pressures, bringing the number of rate increases so far to an even dozen.

Economists surveyed by Reuters earlier this month were unanimous in expecting another quarter-percentage point increase in the benchmark federal funds rate, to 4.0 percent.

Central bank officials have sounded more hawkish in recent weeks in their determination not to let temporary price increases spread into permanently higher inflation levels, and economic growth is also proving resilient.

The Federal Open Market Committee (search), which sets interest rates, will announce its decision after its meeting at about 2:15 p.m. EST on Tuesday.

With financial markets betting on further rate increases in December and January, no substantive changes are expected in the Fed's language about the need for "measured" rate rises.

So, what will Fed officials be considering at Tuesday's meeting?

Resilient Growth, Looming Inflation

+ The U.S. economy shook off the after-effects from Hurricanes Katrina and Rita to post stronger-than-expected growth of 3.8 percent in the third quarter, led by strong consumer and government spending.

+ A record monthly surge in energy costs in September pushed consumer prices up 1.2 percent, the fastest pace in 25 years. The annual rate jumped to 4.7 percent, far higher than U.S. businesses and consumers have become accustomed to in recent years.

So far, energy costs have not muscled through to core inflation (search). But core inflation is near the top of the Fed's perceived tolerance zone of 1 percent to 2 percent, and there are more widespread anecdotal reports that businesses are able to pass on price increases.

+ September payrolls declined 35,000, showing a smaller impact from the hurricanes than feared, and this suggests the labor market in the rest of the nation remains solid. Expectations for the October report are for a rise of 100,000.

+ Consumer confidence has taken a hit since Hurricane Katrina and the resulting spike in energy prices, souring further in October. The Conference Board sentiment index fell to 85.0 in October, a two-year low, after diving in September.

Economists are worried about the outlook for the holiday shopping season, when higher heating costs will also bite. In September, retail sales edged up 0.6 percent outside of the auto and gasoline sectors.

+ The manufacturing sector powered ahead in September, according to the national ISM index, and for October expectations are for still solid growth. The October report will be released as the FOMC meets on Tuesday morning.

What the Fed Has Said

A heavy slate of Fed speakers in recent weeks have all stressed the importance of keeping inflation expectations in check, so that temporary price pressures do not become permanent.

To that end, some Fed officials have specifically said that additional rate increases will be needed.

"We are considerably closer to where policy needs to be than we were 16 months ago, but we are not yet at a point where we can stop and watch the economy evolve for a while," Fed Governor Donald Kohn said on Oct. 19.

Fed Vice Chairman Roger Ferguson said on Oct. 18 that "for now" it appeared likely the Fed could continue to move rates up gradually.

Futures markets are betting the Fed will push through quarter-percentage point increases at its November, December and January meetings.