Inflation according to the CPI remains moderate: no surprises. As the chart above shows, inflation is running in the 2-3% range, regardless of whether or not you include the contribution of energy prices. This level of inflation is very close to what we have seen over the past decade. For reference, on an annualized basis, the CPI is up 2.5% over the past two years; 2.4% over the past three years; 2.3% over the past 5 years; and 2.5% over the past 10 years.
There is nothing alarming about this level of inflation in any sense. No sign of a big inflation increase, and no threat of deflation either. The Fed has absolutely no need to engage in any further quantitative easing or easing of any variety. The Fed's next move will likely be to increase rates, but the timing of that move is unfortunately still shrouded in mystery. Recent action in the bond market (e.g., a 20 bps rise in 2-yr Treasury yields, and a 40 bps rise in 5-yr yields) suggests that the Fed will begin tightening sooner than was expected just a few months ago. I think it's reasonable to assume that we will see more of this action in the months to come.