CPI tracks the average change in prices paid by consumers for a fixed basket of goods and services, released monthly roughly two weeks after month-end. 'Core CPI' strips out the volatile food and energy components and is what central banks watch most closely for policy decisions. Markets move on the surprise relative to consensus, not the absolute number — a 'high' reading that beats a still-higher expectation can rally stocks.
Why it matters
- —It's one of the single most market-moving data releases of the month — equities and bonds can swing sharply within minutes of the print.
- —A hotter-than-expected CPI raises the odds of further rate hikes, compressing valuations; a cooler print does the reverse.
- —Core CPI matters more than headline CPI for policy — food and energy prices are volatile and don't reflect the underlying inflation trend central banks are trying to control.
How to read it
| Above consensus | Rate-hike fears rise — stocks and bonds typically fall |
| In line with consensus | Limited market reaction — already priced in |
| Below consensus | Rate-cut hopes rise — stocks and bonds typically rally |