📰 Fundamentals & Macro·beginner

CPI (Consumer Price Index)

Also called: inflation, consumer price index

The main inflation number — how fast prices are rising for everyday goods. Major driver of central bank decisions and forex moves.

CPI measures how much more (or less) consumers are paying for a basket of goods and services compared to the same time last year. It's the primary inflation gauge, and central banks use it to decide interest rates. Hot CPI = inflation is a problem = central bank likely to hike rates = currency strengthens. Cool CPI = inflation is cooling = central bank can cut = currency weakens. There are two versions to watch: headline CPI (everything) and core CPI (excluding food and energy, which are volatile). Core is usually what central banks focus on because it's more stable. Like NFP, CPI is a three-dot red event on the economic calendar. Spreads widen, volatility spikes, and the initial reaction can be misleading. Wait for the dust to settle before trading the move.

Real trade example

The June 2022 US CPI print at 9.1% (40-year high) triggered the largest single-day USD rally of the year and set up the entire Fed hiking cycle that followed.

Related terms

FOMC

beginner

The US Federal Reserve's rate-setting committee — the most important meeting in global forex, held 8 times a year.

Interest Rate

intermediate

The cost of borrowing money set by a central bank — the single most important driver of currency strength in modern forex markets.

NFP (Non-Farm Payrolls)

beginner

The US monthly jobs report — one of the most market-moving economic releases in forex, always the first Friday of the month at 8:30am ET.

Risk-On

intermediate

Market sentiment when investors are optimistic and willing to take risk — typically bullish for equities, commodities, and high-yield currencies.

Risk-Off

intermediate

Market sentiment when investors are scared and seeking safety — typically bullish for safe havens and bearish for risk assets.

Safe Haven

intermediate

An asset that investors buy when they're scared — historically the US dollar, Japanese yen, Swiss franc, gold, and US Treasuries.

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