Consumer Price Index (CPI)
CPI measures US consumer price inflation and is the second-most market-moving US release, directly shaping rate expectations.
CPI measures how fast consumer prices are rising in the US. It is the key inflation release because it directly shifts expectations for central bank rate moves.
The Consumer Price Index (CPI) measures the average change in prices paid by urban consumers for a basket of goods and services. It is the standard measure of inflation and the release central banks and traders watch most closely after jobs data. Core CPI strips out food and energy, which bounce around, to show the underlying inflation trend. Because interest rates are the primary lever on inflation, a CPI surprise moves rate expectations and therefore currencies.
How It Works
- Tracks a fixed basket of goods and services prices month over month
- Core CPI excludes food and energy to reveal the underlying trend
- Released monthly by the US Bureau of Labor Statistics
Trading Tips
Hot CPI (above forecast) tends to lift the dollar on rate-hike expectations; cold CPI tends to weaken it
Trade the core figure as much as the headline - central banks focus on core
Euro area and UK equivalents (HICP, UK CPI) move EUR and GBP the same way
Related Terms
Sources
- US Bureau of Labor Statistics - CPIOfficial CPI data
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