Inflation.

http://http://dallasfed.org/news/speeches/fisher/2006/fs061219.cfm
Inflation is going to continue to hurt the economy. Inflation can hurt the us economy far more then the housing market. Interest have not been raised for fear of the impact on the housing market. The housing market was inflated and has to come back down.
Inflation can kill the us economy if nothing is done. The US needs to do something within the country (raise interest rates). To try a help the economy with promoting trade is a difficult tasks as many times other countries benefit when the dollar declines in value. Their currency rises and increases their wealth with in their country.
If we raise interest rates we can stop this problem before it takes a bigger toll on our economy.
The economy may stay slow now, but will be better as we go forward.