CPI (Consumer Price Index)

The Consumer Price Index (CPI) measures the average change in prices paid by consumers for a representative basket of goods and services. It is the most closely watched inflation indicator in financial markets because it directly conditions the monetary policy of central banks (Fed, ECB, BoE…). High CPI generally leads to higher benchmark rates to contain inflation, strengthening the currency concerned but weighing on stocks and bonds. Core CPI (ex-food and energy) is often considered more representative of the structural inflationary trend. The monthly US CPI publication is one of the most volatile macroeconomic events for markets.