Consumer Price Index
a.k.a. CPI
A monthly measure of how the prices of a typical basket of household goods and services are changing: the headline inflation gauge.
The Consumer Price Index (CPI) tracks the cost of a basket of things people buy: food, rent, fuel, clothes, haircuts. The change over a year is the headline inflation rate. 'Core' CPI strips out food and energy, which jump around.
CPI is one of the most market-moving releases there is, because it feeds straight into what central banks do with rates. A hotter-than-expected print can send a currency rocketing; a cool one can sink it in seconds.
Reading a CPI print
- Forecast: prices up 3.0% from a year ago.
- Actual: 3.4%.
- Traders think: inflation is hotter, so rates may stay higher for longer.
Bottom line: The currency often jumps on the surprise, not on the number itself.
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