Consumer Inflation Contained

CPI (November 2011)
-CPI All, Month/Month 0.0%
-CPI All, Year/Year 3.4%
-CPI less food & energy, Month/Month 0.2%
-CPI less food & energy, Year/Year 2.2%

Inflation remains well contained as measured by the consumer price index (CPI). The message should be that if the Fed does another QE we will have another inflation spike. Expanded money supply has led neither to substantial increase in economic activity (GDP) nor inflation.

The lack of inflation has helped mortgage bonds today, keeping rates at record lows to end the week.

Here’s yesterday’s producer inflation data.