Consumer Price Index
A measure of inflation that tracks the average change in the price of a basket of goods.
Quick answer
The consumer price index measures inflation as the price change of a basket of goods.
Definition
The consumer price index measures how fast the price of a typical basket of goods is rising, which is how inflation is tracked. It is one of the most market-moving releases because central banks set policy partly on it. A hotter CPI reading can push expectations of higher interest rates and move the currency.
How It Works
- It is the standard inflation gauge
- Central banks react to its direction
- A surprise moves rates expectations and the currency
Trading Tips
1
Watch the core figure that strips food and energy
2
Read it against the central bank target
3
Expect the biggest reaction when it surprises forecasts
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