JoymistaWhat Is CPI and How Does It Measure Inflation?
CPI measures the change in prices of a basket of goods and services consumers buy, and its yearly change is the best-known inflation figure.
Explained
High inflation can push a central bank to raise rates or keep them high, which moves the currency, gold and stocks. That is why markets move hard on CPI releases, especially when the number differs from the forecast.
Example
Example with made-up numbersThe index was 300 a year ago and is 309 now, so yearly inflation is (309 − 300) ÷ 300 = 3%.
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