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The most-watched measure of inflation. It tracks the average change in prices a typical household pays for a basket of goods and services. When the news says "inflation is 4%," it usually means the CPI rose 4% over the past year.
Why It Matters
CPI is the number that drives Fed decisions, Social Security adjustments, and the "real" return on your savings. A CPI well above the Fed's 2% target (as in 2026) is what keeps interest rates high — so the monthly CPI release is one of the most market-moving data points on the calendar.
Key Points
- Measures year-over-year price change of a consumer basket.
- The Fed targets ~2% inflation; readings well above that pressure it to keep rates high.
- Released monthly by the Bureau of Labor Statistics — a major market event.
Related Terms
Common Questions
The most-watched measure of inflation. It tracks the average change in prices a typical household pays for a basket of goods and services. When the news says "inflation is 4%," it usually means the CPI rose 4% over the past year. CPI is the number that drives Fed decisions, Social Security adjustments, and the "real" return on your savings. A CPI well above the Fed's 2% target (as in 2026) is what keeps interest rates high — so the monthly CPI release is one of the most market-moving data points on the calendar.
CPI is the number that drives Fed decisions, Social Security adjustments, and the "real" return on your savings. A CPI well above the Fed's 2% target (as in 2026) is what keeps interest rates high — so the monthly CPI release is one of the most market-moving data points on the calendar.
Measures year-over-year price change of a consumer basket.
The Fed targets ~2% inflation; readings well above that pressure it to keep rates high.
Released monthly by the Bureau of Labor Statistics — a major market event.