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What Is CPI and Why It Moves Markets

CPI, the consumer price index, is the price of one fixed basket of goods and services measured every month, and inflation is how much that price rose over the year. It moves markets because the central bank steers by it and the interest rate is what a currency earns. This paper shows you what the number is and when it lands; the idea as the same trolley priced on the first of every month; the CPI minute on the euro on 11 February 2026, 67.0 pips on real bars; why it moves markets, as a bath whose tap is the rate and whose mark is two percent; and the calendar flags that can be pinned to the chart on your platform.

Difficulty
Beginner
Reading time
5 min
Pages
8
Reviewed by
Saman Rahbar

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The basket number

The consumer price index is the price of one fixed basket of goods and services, measured every month, and published as one number. Inflation is how much that number rose over the year, in percent. In the United States the Bureau of Labor Statistics measures it and publishes it mid-month at 8:30 in New York, 15:30 on the feed's clock. The central bank reads it because it aims to keep inflation near two percent and the interest rate is its tool for doing so, and the rate is what a currency earns. On 11 February 2026 the minute moved the euro against the dollar 67.0 pips, where a pip is the fourth decimal place of the price; on 14 July, 48.7. One basket, one number, one minute a month.

The same trolley every month

Picture a shopping trolley filled the same way on the first of every month: bread, fuel, rent, a haircut, a phone bill, the same items in the same amounts, and only the till receipt changes. The index is that receipt, scaled so that one chosen year reads 100, with these as example readings: 100.0 in January, 100.3 in February, 102.4 a year on. Inflation is how much bigger this year's receipt is than last year's, 2.4 percent in the example. The trolley never changes. That is what makes the receipt a measure of prices rather than of shopping, and what lets one month be compared with another.

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