Consumer Price Index


US annual CPI inflation retreats to 2.3% in April

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Breaking: US CPI rose 3.0% YoY in January

Inflation in the United States, as tracked by the Consumer Price Index (CPI), went up by 3.0% in January compared to the same month last year, surpassing December’s increase, according to the Bureau of Labor Statistics.


What is the US CPI?

The Consumer Price Index released by the US Bureau of Labor Statistcs measures price movements by comparing the retail prices of a representative basket of goods and services. Inflation reduces the purchasing power of the US Dollar (USD), and the CPI is a key indicator to measure inflation and changes in purchasing trends. Generally, a higher CPI reading is seen as positive (bullish) for the USD, while a lower reading is viewed as negative (bearish).

Why it matters to traders?

The US Federal Reserve (Fed) has a dual mandate: to maintain price stability and achieve maximum employment. As part of this mandate, inflation is targeted at around 2%. Inflation became a critical challenge for the Fed, especially in the aftermath of the Covid-19 pandemic, with the CPI reaching multi-decade highs due to persistent supply-chain issues and bottlenecks. The Fed decided to increase interest rates sharply to tame inflation.


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