The CPI report is known as the Consumer Price Index and reports a monthly report dispersed by the Bureau of Labor Statistics. The CPI report measures the monthly change in prices paid by consumers. Look at it as the prices change over a monthly time frame per what each buyer is paying for goods and services. As goods and services fluctuate in price, so does consumer spending. This spending can affect the movement of the stock and crypto markets.
The CPI report has always gone hand in hand with the stock and crypto markets. Released CPI reports will play a factor in how consumers are feeling about the current economy and markets. Generally, a “bad” CPI report revolves around rising interest rates, causing consumers to sell their stock and crypto in case of a long-term recession. This sold stock or crypto can be used to buy goods and services at the higher prices that may come with the CPI report. A “good” CPI report revolves around interest rates going down, which then causes prices to drop on goods and services (this does not happen all the time but often). This causes consumers to feel safer with their money, so they are willing to spend more and invest more (whether in stock or crypto markets).
There are many more factors used when calculating the CPI report. You can find articles on these factors online generally for free. Ensure the articles are trustworthy, so you have an excellent source to follow and answer your questions. I bring this brief written article to you for an overall concept of CPI. I have used the CPI report in my crypto trading techniques to sell or buy based on what the CPI states within the report. This is not financial advice, but another tool you can learn about and potentially use within your trading regimen one day!
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Written by: Matt Senn