CPI

CPI, the Consumer Price Index, measures how much the average price of a fixed basket of goods and services that households buy has changed over time. It is published monthly by the Bureau of Labor Statistics and is the most widely quoted measure of inflation in the United States.

Core CPI strips out food and energy prices, which swing sharply for reasons that often have little to do with the broader economy, to give a steadier read on underlying inflation trends. Headline CPI includes everything and reflects what consumers are experiencing at the register.

CPI is one of the economic releases most likely to move markets each month, because it directly feeds into how the Federal Reserve thinks about the federal funds rate. A CPI report that comes in hotter than expected tends to push investors to expect the Fed to keep rates higher for longer, which typically pressures stock prices, while a cooler than expected reading tends to do the opposite.