The price change of a basket of goods and services purchased by US urban consumers. The most representative inflation measure and a key variable in Fed rate decisions. • Released monthly, second week (Bureau of Labor Statistics) • Interpreted as year-over-year (YoY %) change • Below 2%: Fed target met, rate cuts possible • 2–3%: Stable inflation • 3–5%: Caution zone, continued tightening likely • Above 5%: Overheating — reached 9.1% in 2022 (40-year high) Core CPI (excluding volatile food and energy) is what the Fed watches more closely. CPI release days see significant market volatility, with the surprise factor (vs expectations) driving market direction.