The threat of higher inflation has already put the Federal Reserve on notice. And more evidence of rising prices and wages is likely to nudge the central bank closer to another increase in U.S. interest rates.

It just won’t happen this week.

Wall Street places very low odds on the Fed raising the cost of borrowing on Wednesday at the end of its latest two-day meeting. The central bank wants to sift through more evidence before making its next move.

Read:Fed will make 4 rate hikes this year, economists now say

There’s a lot to sift through.

Start with the Fed’s preferred tool to measure inflation known as the PCE index. The more closely followed core PCE that strips out food and energy appears to have risen again in March and that could push the yearly increase in inflation to 1.9% — just a hair under the Fed’s 2% target. The report will released Monday.

Read:Signs of higher U.S. inflation are popping up everywhere

Is 2% a redline that cannot be crossed?

No. The Fed is OK with letting inflation run a bit higher, but if it does, the central bank would almost certainly raise its benchmark interest rate three more times this year instead of a planned two. That means higher borrowing costs for consumers and businesses.

After the Fed’s powwow, the employment report for April will cap off the week. Hiring is expected to snap back with an increase of around 200,000 new jobs after a disappointing 103,000 gain in March.

The nation’s 4.1% unemployment rate could even fall for the first time in six months and settle at or below 4%, a level it last touched at the end of 2000.

Read:First-quarter GDP grows solid 2.3% as businesses grab baton from consumers

More jobs and lower unemployment is usually great news, but there’s a catch. After almost nine years of economic growth, the U.S. is running into constraints, and one of them is labor. Firms can’t find enough good workers to fill a near record number of job openings.

“The biggest challenge for the U.S. economy now is too few workers rather than lack of jobs,” said Michael Gregory, deputy chief economist at BMO Capital Markets.

The result is rising pay and benefits. Worker compensation rose from the first quarter of 2017 to the first quarter of 2018 at the fastest pace in 10 years.

Hourly wages, another way to look at what workers earn, shows the same upward tilt. Earnings are forecast to rise modestly in April and keep the yearly increase around 2.7%, up from the 2% level that prevailed through most of the current expansion.

Read:Worker compensation rising at fastest pace since 2008

Will higher wages also lead to higher inflation as well-worn economic models suggest? Not necessarily. Companies can pay workers more if they produce more in the same amount of time without stoking inflation.

The problem is, productivity has been unusually weak since the end of the Great Recession. And the latest snapshot of productivity for the first quarter is unlikely to show a big breakthrough.

Another way the effect of higher wages could be muted if is companies keep prices steady, meaning they’d have to accept less in profits.

Stiff competition and price-sensitive customers have limited what companies charge, and there’s plenty of evidence to suggest that’s still the case. But a dam can only hold back a rising water level for so long.

“I remain confident that wage growth will finally crack 3% on a year-over-year basis in 2018 after several years of inching up from 2% to the high 2%’s,” said chief economist Stephen Stanley of Amherst Pierpont Securities.