While I was looking for something else at the econblog Zerohedge I stumbled cross this genuinely wry post which asks two questions. If inflation is so low:
- Why do the costs of the Federal Reserve cafeteria rise at a multiple of the notional rate of inflation?
- Why are wages at the Federal reserve rising at a multiple of the notional rate of inflation? (and faster than cafeteria prices are)
There are graphs, of course.
In all seriousness, I suspect it’s because they’re measuring different things. That having been said, I think that while for the Fed we may be in a period of low inflation most people are experiencing things as a period of stagnant wages and moderate inflation. They’re either falling behind or barely able to keep up.