Today, on his blog, Paul Krugman wrote:

When I first read this, I thought he meant to write, “quell surprise,” as an ironic, “Stop the surprise!” But this was not what he meant. The first thing I did was to see if there was some kind of strange spelling for “quell,” given that my spelling is at best poor. There was not. This lead me to think that “quelle” was a foreign word, and it is, but that isn’t the whole story. It would have been quite easy if Krugman had just typeset the sentence properly:

The italics make all the difference in the world. They alert the reader to the fact that the words are foreign. “Quelle surprise” is French for, “What a surprise!” It also sounds nothing like “quell surprise,” and sounds more like, “queue sue preez.”

In general, it is not a good idea to use foreign phrases in English writing—especially when they look to the ignorant like a reasonable English equivalent. But if one is to use them, they must be highlighted as such, and this normally means italics.