US Core Consumer Price Index
Published:
A US inflation measure that excludes food and energy prices from the Consumer Price Index.
Full explanation
The US Core Consumer Price Index measures the change in prices paid by urban consumers for a broad basket of goods and services, excluding food and energy. It is commonly called core CPI because those excluded categories can be especially volatile. The US Bureau of Labor Statistics publishes both the index level and percentage changes within its monthly CPI release.
Why traders watch it
It is watched as an indicator of underlying consumer-price pressure that can shape expectations for Federal Reserve policy, US interest-rate pricing, Treasury yields and USD sentiment.
Market interpretation
- US dollar
- Unexpected changes can affect expectations for US monetary policy and interest-rate differentials.
- US Treasury market
- The result can prompt reassessment of expected policy rates and inflation compensation.
- Equities and other risk assets
- Market reactions may reflect changes in discount-rate expectations and the perceived inflation backdrop.
Stronger vs weaker outcomes
A higher-than-expected result may be viewed as evidence of firmer underlying inflation pressure, while a lower-than-expected result may be viewed as softer pressure. The market response can also depend on the headline CPI reading, the composition of price changes and the broader policy backdrop.
A higher-than-expected reading may be interpreted as firmer underlying inflation pressure and may contribute to expectations for a less accommodative policy outlook.
A lower-than-expected reading may be interpreted as softer underlying price pressure, subject to the broader inflation, activity and policy backdrop.
Higher-than-expected core CPI may signal firmer underlying inflation pressure; lower-than-expected results may signal softer pressure.
Typical volatility
High. The index level and its monthly or annual percentage changes are different ways of presenting the same series. Seasonal adjustment, rounding, revisions to seasonal factors and details within the release can affect comparisons and market interpretation.
Trading considerations
- Compare the result with consensus expectations as well as the prior reading.
- Distinguish the index level from the monthly and 12-month percentage changes.
- Review the headline CPI reading and major component moves alongside core CPI.
- Expect liquidity conditions, spreads and short-term volatility to change around the scheduled release time.
- Consider the wider Federal Reserve communication and US activity-data backdrop when interpreting the result.
Educational guidance only — never a trading signal or recommendation.
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