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CPI
(Consumer Price Index)
CPI (Consumer Price Index) tracks price changes for a basket of consumer goods/services (e.g., food, housing, apparel), measuring inflation. Core CPI excludes volatile food/energy prices.
The Fed targets 2% annual CPI inflation using tools like interest rate hikes. U.S. CPI peaked at 9.1% YoY in June 2022 (highest since 1981), driven by pandemic stimulus and supply chain issues. Critics argue CPI underweights housing (owners' equivalent rent vs. actual prices) and healthcare. Markets react sharply to CPI reports—higher CPI often triggers selloffs in stocks (S&P500) and bonds. The ECB and IMF use similar indices for policy decisions.
The Fed targets 2% annual CPI inflation using tools like interest rate hikes. U.S. CPI peaked at 9.1% YoY in June 2022 (highest since 1981), driven by pandemic stimulus and supply chain issues. Critics argue CPI underweights housing (owners' equivalent rent vs. actual prices) and healthcare. Markets react sharply to CPI reports—higher CPI often triggers selloffs in stocks (S&P500) and bonds. The ECB and IMF use similar indices for policy decisions.