CPI (Consumer Price Index)

The Consumer Price Index (CPI) measures how much the average price of everyday goods and services—like groceries, gas, and rent—changes over time. It's basically inflation's report card. You'll hear the Federal Reserve and news outlets talk about CPI constantly because it tells us whether your money is losing buying power. When CPI rises quickly, it means prices are climbing faster than usual, which can hurt your savings but might help companies with pricing power. For example, if CPI jumps 5% in a year, that same $100 grocery bill from last year might cost $105 today. Investors watch CPI closely because high inflation often leads to interest rate hikes, which can affect stock valuations.