How do you say bond vigilantes in French?

NEW YORK (CNNMoney) -- Have you heard about the hottest new trend in Europe? It's all the rage in Paris, Milan and Berlin. Inflation!

The European Central Bank raised interest rates Thursday morning, acknowledging that it has to get ahead of pricing pressures.

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It's a curious step that could backfire given that many nations in Europe are still faced with massive financial problems. Portugal, for example, finally made it official Wednesday and asked for a bailout.

The ECB's move comes on the same day that the central banks of two other developed markets, The Bank of England and The Bank of Japan, left interest rates unchanged.

And it's highly unlikely that the Federal Reserve is going to pull on its rate hiking boots anytime soon -- no matter what inflation hawks like Dallas Fed President Richard Fisher and Minneapolis Fed President Narayna Kocherlakota say.

Still, even though the bond market had little reaction to the ECB rate hike Thursday, it has been behaving recently as if it expects rate increases sooner rather than later. The overall trend in the past few weeks has been to sell bonds.

The yield on the 10-year U.S. Treasury note now sits at about 3.56%, up from 3.14% as recently as March 16 -- a time when Japan nuclear disaster fears were at a fever pitch. News of another Japan earthquake Thursday had little impact on bonds as well.

With each passing day, the safe haven trade that caused yields to dip seems to be a distant memory. It is becoming increasingly clear that the bigger economic fear may be inflation -- or at the very least rising commodity prices and their impact on consumers -- as opposed to a Japan-led global slowdown.

However, inflation worries may not become so dominant that they lead to a significant spike in interest rates. The so-called bond vigilantes may be saying "Oui oui!" to the ECB news and the usual hawkish tone from ECB President Jean-Claude Trichet.

But the reality is that the 10-year yield will probably remain stuck in the 3% to 4% range for a while because the Fed just isn't going to follow the lead of the ECB, the People's Bank of China and other central banks that are now tightening.

Steve Lear, deputy chief investment officer for fixed income at J.P. Morgan Asset Management New York, noted that rising commodity prices does not necessarily create inflation. In the most classic econ 101 sense, you need a much better labor market for inflation to rear its ugly head.

That's not happening yet. The government reported last week that while employers are hiring again, they are not doling out lavish pay packages. Wages were stagnant in March.

Lear also said that there should be a little bit of upward pressure on interest rates once the Fed's $600 billion bond buying program expires in June.

The Fed launched its second round of quantitative easing last fall. It is now widely believed that the Fed will let QE2 run its course -- and that there won't be a QE3. Taking the Fed out of the equation as a buyer of last resort should lead to slightly higher rates.

"The Fed has a do-nothing scenario. They stop buying Treasuries in June. But that scenario is, in fact, tightening," Lear said.

Still, some think that the Fed might be behind the curve.

"The U.S. is sailing alone. The Fed doesn't see the inflation that the rest of the world seems to see," said Kenneth Naehu, managing director and head of fixed income with Bel Air Investment Advisors in Los Angeles. "Part of it is rose-colored glasses and part of it is how they measure inflation."

Naehu said it's almost impossible to know just where rates are headed over the next few months, but he said he was fairly confident that rates will move "significantly higher" over the next few years.

Naehu also pointed out that the Fed is trying to create more inflation to get the economy rolling. And he thinks it will ultimately succeed.

"The Fed's preponderance to continually print money will eventually create an inflationary environment," he said. But that's their goal. So nobody should be shocked."

Scott Carmack, fixed income analyst with Leader Capital Corp., a money manager in Portland, added that the Fed is embarking on a dangerous game by dismissing inflation.

He said that if rates stay too low for too long, the dollar could weaken further -- which could just make inflation pressures down the road worse.

"It still seems that the Fed is intent on ignoring the headline inflation numbers," he said. "While food and energy prices may be volatile numbers, they are real."

Bob Reiser, senior investment strategist with Balentine, an investment firm in Atlanta, agrees. He said that this is the "early phase" of a new inflation cycle, and that it would be a mistake for investors -- or the Fed -- to assume the run-up in commodities is a temporary phenomenon.

-- The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks.