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Consumer price index

This article includes an explanation of the CPI and the core CPI for the United States and its importance, with a look at previous data and expectations for today's data with its impact on the markets and Federal Reserve decisions.

Consumer price index

The Consumer Price Index determines the inflation rate from the point of view of consumers when they buy goods and services. This index is also considered one of the indicators most monitored by traders and is considered a basic indicator for determining financial inflation and purchasing trends among society in the United States.

The primary goal that the Central Bank seeks is to achieve price stability, and one of the ways to combat inflation is that the Central Bank seeks to raise the interest rate to help prices fall. High interest rates attract foreign investment, thus increasing demand for the country's currency

Annual inflation in the United States is likely to accelerate for the second month in a row to 3.6% in August from 3.2% in July, due to base effects from last year and higher oil prices amid tight supplies. Compared to the previous month, the CPI is expected to rise 0.6%, the largest increase since June 2022, with gasoline prices at gas stations jumping almost 6%. On the other hand, core inflation, which excludes food and energy, is expected to slow for the fifth month in a row to 4.3%, the lowest level since September 2021, from 4.7% in July, due to moderation in shelter and services costs. While the base rate is still about twice above the Fed's 2% target, it is well below the 6.3% rate recorded the previous year. The core CPI is expected to rise by 0.2% in the month, as was the case in July

Expectations for today's statement and how it will affect the currency:

Expectations indicate that inflation data will decline to a rate of 3.6%.

If the statement is issued at a lower rate than expectations, it will affect the currency in a negative way, but if the statement is issued at a rate higher than expected, it will affect the currency in a positive way.

Consumer price index
CPI y/y



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