Basically the Fed has pumped a lot of money into the financial system. This money has not been released into the market yet and it sits as excess reserves. Also, the Federal Reserve has bought government debt, which is one of the main reason the deflationary correction did not happen, therefore turning the crisis into a long depression.
There is both understanding and error in your statements. Deflation is here and now, and has been happening for at least a year. What the Fed does has little bearing on that now, and arguablely never could have.
http://www.nfib.com/Portals/0/PDF/sbet/sbet201009.pdfCheck out the first and second charts on page 10. Your thinking of total base currency, basicly M2, as your judge of whether there should be inflation or not. However, the majority of transfers in the US isn't currency, but credit. So a better measure of future inflation is the trend in M3 (M2 + credit), which has been in freefall for two years or more, the massive currency creation by the Fed notwithstanding. Our near term outlook is all deflation, all the time, for as far into the future as I am willing to guess.