The best-known inflation gauge · it moves rate expectations directly.
The short answer
- What is the Consumer Price Index (CPI)?
- Consumer Price Index: the cost of a standard basket of goods and services.
- When does CPI get it wrong?
- The basket stays fixed while behavior changes. Housing lags by months. You can see it against market data on the "Rates and yields" page. Open the rates and yields page →
Indicator limit
The basket stays fixed while behavior changes. Housing lags by months.
Read it with
Treasury yield: an inflation surprise shows up in the yield before the rate decision.
Answers: how is the economy doing?
What it measures
The Consumer Price Index measures the change in cost of a fixed basket of goods and services that US households typically buy. The US Department of Labor publishes it monthly, and on release day it is the first number to move every market: stocks, bonds, currencies and metals.
The reading that matters
Not the headline reading but core (Core), which leaves out food and energy. Food and energy swing for reasons unrelated to monetary policy (weather, war, a production decision), so they mislead on direction more than they help. The Federal Reserve builds on core, so the market does the same.
The surprise, not the number
The market prices expectations in advance, so what moves prices is the gap between the release and the forecast, not the number itself. Inflation at 3% can lift the market if 3.5% was expected and sink it if 2.5% was expected. Same number, opposite effects.
Why it shakes stocks
Because it drives rate expectations. Inflation above forecast means higher rates for longer. Higher rates discount future earnings more heavily and press on valuations, and growth stocks, whose earnings sit far in the future, feel it most.
Hypothetical example
A core reading comes in 0.1 point above forecast: the 2-year yield jumps 15 basis points within minutes, and growth stocks fall more than twice as much as defensive sectors. A tenth of a point in a monthly number repriced a market worth trillions.
Read it with
Read it with the yield curve, which turns its effect into rate expectations. Read it with labor market data, since the Fed weighs inflation and employment together. And read it with implied volatility, which prices the expected size of the move before the release.
Where to see it on the platform
The macro calendar schedules its release date and the forecast. The macro dashboard shows the latest reading within its combined verdict on the environment.
