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Consumer prices rose a bit last month, but inflation still seems to be in check as the price cars, clothing, and hotels dropped.

The Consumer Price Index (CPI) rose 0.2 percent last month, according to the Labor Department, and that was mostly due to higher fuel prices.

With energy and food prices excluded, the core CPI stayed unchanged for the third consecutive month. Over the course of the past 12 months, core prices have risen by a mere 0.6 percent, the smallest annual rise since the index began in 1957.

This latest round of data would seem to support the Federal Reserve’s recent moves to boost the economy. Earlier this month, the Fed announced that it would purchase $600 billion in Treasury bonds in an effort to lower interest rates and spur spending.

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After a two-week selloff, Treasury bond are starting to stage a comeback today (Tuesday) as investors review the latest inflation data.

On Tuesday morning, the government reported that the Producer Price Index (PPI), a measure of prices at the wholesale level, rose by 0.4 percent last month. That’s the same level at which it increased in August and September, and below analysts’ expectations for 0.8 percent growth.

Investors will now turn to the Consumer Price Index (CPI), which comes out tomorrow morning (Wednesday). Analysts also expect that the CPI will reveal dangerously low levels of inflation.

Bond traders watch inflation data very closely, as expectations for how quickly prices rise over the long term could compete with the low yields on government bonds.

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Here we go again.  Baltimore mortgage rates on fixed mortgages dropped to record lows this week after the Federal Reserve unveiled its huge bond-buying program to help stimulate economic growth.

Freddie Mac says that the average rate on 30-year fixed loans fell to the lowest level on record dating back to 1971.

The average rate on 15-year fixed loans fell the lowest levels since the survey began in 1991.

The Federal Reserve unveiled plans last week to purchase $600 billion in Treasury bonds. On Wednesday, the central bank elaborated on that plan, saying that it hopes to buy $105 billion in Treasurys over the next month. The increased demand means that Treasurys will produce lower yields for investors. Mortgage rates often move along with those bond yields.

Rates on five-year ARMs hit their lowest levels since January 2005.  Rates on one-year ARMs were unchanged.