Washington - Prices for various goods and services that can be purchased in the Washington D.C. area Ivory Tower in which the Federal Reserve Board meets around eight times a year have increased year over year at a 2% annual clip, according to inflation data release by the Labor Department this morning.
The CPI ( consumer price index) is calculated by the Labor Department by selecting a basket of goods and services available in the Washington D.C. Ivory Tower building, including various items such as coffee and donuts at the Tower restaurant, internet access and devices used by the Fed Governors, and shoe shining services in the lobby. Items are removed from the index if they become too expensive, last month the steak sandwich at the Tower restaurant was removed from the calculation when the price went up 20%.
The Federal Reserve has been concerned in the last few years that prices in their Ivory Tower have been increasing at a rate less than 2%, thus justifying their decision to keep interest rates at near zero, years after the overall U.S. economy has recovered.
In the area outside the Tower, which includes the entire rest of the United States, consumers must unfortunately purchase health care, fuel, utilities, food and housing, all of which, some consumers and experts suspect, are substantially higher than they were several years ago. There is not currently an effort by policy makers to calculate those prices, according to sources at the Central Bank.