The unexpectedly large decline in the November CPI (-0.3% vs. -0.1%) was almost entirely driven by falling oil prices. The CPI ex-energy rose 0.1% for the month and is up 1.9% over the past year.
The chart above shows the year over year change in the CPI and the "core" CPI (ex-food and energy). By these measures inflation has been bouncing around between 1% and 4% over the past decade, and currently looks to be declining a bit on the margin.
Most of the bouncing "noise" in the year over year measure disappears if we remove energy prices from the CPI. The chart above shows the CPI index ex-energy, and it uses a semi-log scale on the y-axis to show that the average annual rate of increase in the index has been 2.0% for the past 12 years. No sign of anything even remotely deflationary here. Once energy prices stabilize, we are likely to discover that CPI inflation is running right around 2% a year, as it has been for a very long time.
The Fed is unlikely to delay its plans to raise short-term interest rates just because the CPI index has declined in two out of the past four months (November and August). Any hint of deflation is entirely oil-related, and therefore not something that should concern the Fed.