On Wall Street, the sun is coming out and the temperatures are warming, but that is doing little to soothe increasingly nervous investors.

It seems that our old friend the bond market has returned to the scene, barking about possible inflation in the air. The culprit this time: a surprising rise in the first-quarter GDP deflator figure. It's not surprising. Oil and gas prices have spiked modestly and there's a lot of concern about rising wage pressures.

In a sense, the stock market has provided us some clues about the increasing fears about inflation. Commodity-focused stocks have started rising and price-sensitive cyclical stocks have also stirred to life. Moreover, gold prices, long dormant, have started to tickle higher.

The question is, should we start to get very concerned about inflation? Should we start to study the tea leaves more closely for a possible

Fed

move to raise rates as a means to ward off inflationary pressures?

Some would argue that the Fed would like an excuse to put a stick in the stock market's eye, but at the same time the Fed is focused on ensuring that the recovery of the global financial markets remains intact. Indeed, while Asia, ex-Japan, is showing some hints of life, Japan, the big dog in that region, remains sluggish. Europe, muddling through a war in the Balkans, is also having trouble getting untracked, so it is hard to see how the global growth scenario will force the Fed's hand anytime soon.

Still, the inflation bug won't go away too quickly. The drop in bond prices and chatter about inflation is on the rise just as we are about to enter that quietish period between earnings seasons. With much of the corporate reporting out of the way, investors start to look elsewhere for guidance. Sometimes that leads to overexaggerated concerns about macroeconomic issues.

But the case for looming inflation problems is not so easy to make. PCs, cell phones and other technologies keep getting cheaper. Foodstuffs like Ronzoni pasta aren't getting more dear. Sure, movies cost more in Manhattan, but VCRs are going for a song. Also, consider much-discussed energy costs. While oil prices have risen from hideous lows, it's not easy to see how they could really take off. Supply is large and exploration efforts are on hold, waiting to kick in once prices can get to a reasonable level. That provides a certain cap on how high oil prices can get. In terms of food costs, farmers are aching for a modest increase in prices, but the fact is that there's still an enormous supply issue that makes it difficult for food prices to muster any sustained move higher.

The percolating concern about inflation, as reflected in the stock and bond markets, is something that should strike investors as familiar. As the economy has hummed along at a steady, solid pace, macroeconomic fears have swung from disinflation/deflation to inflation to disinflation/deflation to inflation. Last fall we had the mother of all deflationary fears, and now we are swinging back to the other side. All the while, things continue to motor ahead.

Buffetmania:

The legendary investor holds his aw-shucks annual meeting this weekend in Omaha, Neb. Record crowds are anticipated, primarily because of

Berkshire Hathaway's

(BRKA:NYSE) acquisition of

General Re

during the past year. But even as the hotels fill with Buffett acolytes, one wonders how the Value Sage must feel. For the past few years, the roaring gains made by technology stocks, especially in the Internet sector, have largely passed this venerable expert by. News of a Buffett investment no longer shocks the market into action as it once did and the Berkshire Hathaway stock has not participated in recent rallies. Chris Edmonds, our Atlanta-based Buffett follower, will be in Omaha to track the great one this weekend. It will be intriguing to get his read on the market, given the wooly times we are experiencing.

Best ad on CNBC:

There's some tango/dance ad that is the strangest thing I've ever seen. Maybe it's only running locally.

Weekend Reading List:

If you haven't read the series of stories on the

challenges facing

Disney

(DIS) - Get Report

by

Alex Berenson

, you should. Good, thorough analysis and an easy read.

Herb's Back:

Herb Greenberg returns next week from vacation. And we'll have another surprise for you next week as well.