Part 1: What is CPI data
The CPI, or Consumer Price Index, measures the average change over time in the prices that urban consumers pay for a basket of consumer goods and services. More precisely, some of the goods and services included in the basket are food (at home and out), energy, gasoline, electricity, new cars, used cars, clothing, healthcare, shelter, transportation services, healthcare services, and more.
Part 2: Announcement time
Under normal circumstances, the US CPI data will be released in the second or third week of each month, and the approximate release date is between the 10th and 13th of each month.
Part 3: Impact of CPI data
The impact of CPI on exchange rates. CPI is one of the important indicators to measure inflation in the United States. The Fed adjusts monetary policy with reference to this data, which in turn affects the trend of the dollar exchange rate in the short term. If the CPI indicator is higher than expected, it should be regarded as USD strength/up, otherwise, it should be regarded as USD weakness/decline.
Generally speaking, the level of CPI directly affects the introduction and intensity of a country's macroeconomic control measures, such as whether the central bank adjusts interest rates and whether to adjust the deposit reserve ratio. At the same time, the level of CPI also indirectly affects changes in capital markets (such as stock markets, futures markets, capital markets, and financial markets).
The impact of CPI on the stock market. When the CPI continues to rise, the investment direction will turn to the high-return investment market such as the stock market; if the CPI continues to rise, the attractiveness of the stock price to the capital will gradually decrease, and the investor's desire for stock investment will gradually decrease, and the funds circulating in the stock market will be withdrawn. .
The impact of CPI on the cryptocurrency market. The CPI is higher than expected, and the cryptocurrency is likely to fall.
The link between CPI and Fed rate hikes. When the CPI is higher than expected, it means that prices will rise and inflation will occur. The Fed raises interest rates to curb inflation. Higher interest rates help fight rising prices because it reduces demand for products such as cars and homes. The higher the CPI, the more serious the inflation, the faster the Fed's pace of interest rate hikes, and the reduction of market capital flows, which ultimately leads to a decline in the overall financial market.
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