I liked an analysts comment that the Fed need to kill RE and Commodities bubbles to contain inflation (and from recent Fed talk, they look serious about inflation). The Fed has to increase rates to kill both these bubbles as higher rates will slow economy (reducing demand for commodities), strengthen dollar and bust Real Estate. Any attempt for a way out through more money printing, will be disastrous.
I now believe that Fed is going to raise rates that will create a mini recession causing a bust in demand for real estate starters, as well as commodities (including oil) and will hence contain inflation. We will need to build our economy from there onwards but it seems to be the only way forward.