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Consumer Price Index (CPI)
Term category: Economics
In 10 words or less: An index that measures inflation by looking at the prices of consumer goods.

Definition: The CPI is an economic indicator that measures the change in a batch of consumer products.  The change in price is considered to be inflation.

Advice: The CPI is a closely watched indicator because inflationary concerns are the big driver behind rising interest rates. When inflation is thought to be on the rise, the Fed begins to raise rates to slow the economy.

 



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